Question

MC Qu. 95 A job was budgeted to require... A job was budgeted to require 2 hours of labor per unit at $12.00 per hour. The job consisted of 8,000 units and was completed in 15,000 hours at a total labor cost of $196,200. What is the direct labor rate variance?

Answer 1

The direct labor rate variance is negative 16,500

Step-by-step explanation:

8,000 units at 2hours per unit = 16,000 hours x $12 per hour = $192,000 standart cost for the job

actual 15,000 hours and $196,200 total labor cost

labor cost per hour = 196,200/15,000 = 13.1 actual rate per hour

( standar rate - actual rate ) x actual hours = rate variance

(12 - 13.1) x 15,000 = -1.1 x 15,000 = -16,500