Final answer:
The variance between budgeted and actual labor costs on a performance report that is related to the rate of pay would be identified as a direct labor rate variance.
Step-by-step explanation:
The difference between the budgeted and actual amounts for a direct labor performance report can be attributed to several types of variances. When focusing specifically on the variance due to paying more or less per hour for labor than expected, it would be classified as a direct labor rate variance. This variance occurs when the actual rate paid for labor differs from the expected or standard rate that was budgeted.
If the variance related to the amount of labor time spent versus the amount of time that should have been spent according to the standards, it would be a direct labor efficiency variance. A budget variance is a general term that includes all variances from the budget, while a direct labor spending variance is the difference between the actual total labor cost and the budgeted total labor cost.
The difference in a performance report for direct labor between the budget and actual amounts is a direct labor spending variance. This variance represents the difference in the actual amount spent on direct labor compared to the budgeted amount.