Question

The following labor standards have been established for a particular product: Standard labor-hours per unit of output 8.0 hours Standard labor rate $ 15.50 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 10,100 hours Actual total labor cost $ 154,025 Actual output 1,200 units What is the labor rate variance for the month

Answer 1

Answer:

Direct labor rate variance= $2,525 favorable

Explanation:

Giving the following information:

Standard labor rate $15.50 per hour

Actual hours worked 10,100 hours

Actual total labor cost $ 154,025

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

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

Actual rate= 154,025 / 10,100= $15.25

Direct labor rate variance= (15.5 - 15.25)*10,100

Direct labor rate variance= $2,525 favorable