Question

The standard number of hours that should have been worked for the output attained is 6,000 direct labor hours and the actual number of direct labor hours worked was 6,300. If the direct labor price variance was $3,150 unfavorable, and the standard rate of pay was $9 per direct labor hour, what was the actual rate of pay for direct labor?A. $9.00 per direct labor hourB. $9.50 per direct labor hourC. $8.50 per direct labor hourD. $7.50 per direct labor hour

Answer 1

Actual Rate= $9.5 per hour

Step-by-step explanation:

Giving the following information:

Actual number of hours= 6,300

Direct labor price variance= $3,150 unfavorable

Standard rate= $9 per direct labor hour

To calculate the actual rate, we need to use the direct labor rate (price) variance formula:

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

-3,150 = (9 - Actual Rate)*6,300

-3,150 = 56,700 - 6,300Actual Rate

-59,850 = -6,300Actual Rate

-59,850/-6,300 = Actual Rate

$9.5 = Actual Rate