Question

The following information describes a​ company's usage of direct labor in a recent​ period: Actual direct labor hours used 33 comma 000 Actual rate per hour $ 22.00 Standard rate per hour $ 16.75 Standard hours for units produced 32 comma 500 How much is the direct labor rate​ variance?

Answer 1

Answer:

$173,250  (Adverse or unfavorable)

Explanation:

The direct labor rate variance is the difference between the actual cost of direct labor and the standard cost of direct labor used up by an entity during a given period.

When the Actual labor cost is more than the standard, we have an adverse or unfavorable variance and vice versa.

It is given as

Direct labor rate variance

= Actual hours (Actual rate - standard rate)

=33,000(22 - 16.75)

= $173,250  (Adverse or unfavorable)