Question

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

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