Question

Production used 2.5 labor hours per finished unit, and the company actually paid $21 per hour, totaling $52.50 per unit of finished product. What amount is the company’s direct labor rate variance for March?

Answer 1

Answer:

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

Explanation:

Giving the following information:

The production used 2.5 labor hours per finished unit, and the company paid $21 per hour, totaling $52.50 per unit of finished product.

We weren't provided with enough information to solve the problem. We need estimated production hours and rates. But, I can leave the formula to solve it.

To calculate direct labor rate variance, we need to use the following formula:

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