Answer:
Standard Rate = $ 5.65
Explanation:
Wolfen Company
Actual direct labor rate $5.00
Standard direct labor hours allowed 11,000
Actual direct labor hours 10,000
Direct labor rate favorable $6,500
Using formula to find the unknown figure
Direct Labor Rate variance = Actual Hours ( Standard Rate-Actual Rate)
$6,500= 10,000( Standard Rate-5)
$6,500/10,000 = (Standard Rate-5)
0.65+ 5=Standard Rate
Standard Rate=5+0.65= $ 5.65
We can check by putting it in another formula
Direct Labor Rate variance= (actual hours * standard rate)-(actual hours* actual rate)
$6,500=(10,000*Standard Rate)-( 10,000 *5.0)
$6,500= (10,000*5.65)-( 10,000 *5.0)
$6,500= (56,500)-( 50,000 )
$6,500=$6,500 (favorable) when standard price is higher than actual price
