Question

The standard number of hours that should have been worked for the output attained is 10,000 direct labor hours and the actual number of direct labor hours worked was 10,500. if the direct labor price variance was $10,500 unfavorable, and the standard rate of pay was $12 per direct labor hour, what was the actual rate of pay for direct labor?

Answer 1

Direct labor is manufacture or services labor that is allocated to an exact product, cost focus, or work order.
To solve this, the equation would be: price variance / direct labor hours x standard rate of pay
So plugging in our data:
= 10,500 / 10,500 + 12
= 13
The actual rate is $13 per direct labor hour.