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? Select one: a. $11 per direct labor hour b. $9 per direct labor hour c. $13 per direct labor hour d. $12 per direct labor hour

Answer 1

Answer:

The correct answer is $13 per direct labor hour

Explanation:

Giving the following information:

Actual hours= 10,500.

Direct labor price variance= $10,500 unfavorable

Standard rate= $12 per direct labor hour

We need to use the direct labor rate variance formula:

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

-10,500= (12 - actual rate)*10,500

-10,500= 126,000 - 10,500actual rate

-136,500/-10,500= actual rate

13= actual rate

$13 per direct labor hour