Answer:
Direct labor rate variance= $650 unfavorable
Explanation:
Giving the following information:
Standards for the product are:
Labor: 2 hours per unit at $8 per hour.
During December, the company produced 1,000 units.
Labor: 2,500 hours worked at a total cost of $20,625.
To calculate the labor rate variance, we need to use the following formula:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 20,650/2,500= $8.26
Direct labor rate variance= (8 - 8.26)*2,500
Direct labor rate variance= $650 unfavorable