Question

The following materials standards have been established for a particular product: Standard labor- hour per unit of output 3.3 hours Standard labor rate $16.15 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 6,300 hours Actual total labor cost $103,635 Actual output 2,000 units What is the labor rate variance for the month

Answer 1

Answer:

The labor rate variance for the month = $1890

Explanation:

Given values:

Standard labor hour per unit = 3.3 hours

Standard labor rate =  $16.15 per hour

Actual hours worked = 6,300

Actual total labor cost =  $103,635

Actual output = 2,000 units

Now, we calculate the labor rate variance with the help of given information. Below is the calculation of Labor rate variance.

Labor rate variance = ( Actual labor cost) – (Standard rate × Actual hours)

= 103635 – (16.15 × 6,300)

= $1890