Question

Fabulous Fabrics budgeted to manufacture 1300 curtains in February. Actual output for March was with total direct materials cost of $3700 and total direct labor cost of $5250. The direct labor standard is 20 minutes per curtain at a direct labor rate of $15.50 per hour. The direct material standard is 0.75 yards of direct materials per curtain at a cost of $11 per pound. Actual direct labor hours were 150.
A variance analysis for February may show a direct labor rate variance of ______. (Round any intermediary calculations and your final answer to the nearest cent.)

Answer 1

Answer:

$2,925 Unfavorable

Explanation:

The computation of direct labor rate variance is shown below:-

Actual rate = Direct labor cost ÷ Actual direct labor hours

= $5,250 ÷ 150

= 35

Direct labor rate variance = (Selling rate - Actual rate) × Actual hours rate

= ($15.50 - 35) × 150

= -$19.5 × 150

= $2,925 Unfavorable

Therefore for computing the direct labor rate variance we simply applied the above formula.