Change in labor productivity

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What is the amount of variance that is attributed to the change in labor productivity?  Use the following data to calculate the variances.

The following information has been prepared for a home health agency.

                                                               Budget          Actual

Wage Rate per Hour                                    $16.00          $17.00

Fixed Hours                                                 320               320

Variable Hours per Relative Value Unit               1.0                   1.1

Relative Value Units (RVUs)                           1,000               1,200

Total Labor Hours                                        1,320                1,640

Labor Costs                                                $21,120               $27,880

Cost per RVU                                              $21.12              $23.23

Budgeted costs at actual volume would be $25,344 ($21.12 × 1,200), and the total variance to be explained is $2,536 Unfavorable ($27,880 - $25,344). Be sure to specify whether the variance is favorable or unfavorable.

Reference no: EM131513066

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