Question

B MC Qu. 10-176 (Algo) The following labor standards have been ... The following labor standards have been established for a particular product: Standard labor-hours per unit of output 8.9 hours Standard labor rate $ 15.95 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 11,000 hours Actual total labor cost $ 173,030 Actual output 1,650 units What is the labor rate variance for the month

Answer 1

Direct labor rate variance= $2,420 favorable

Step-by-step explanation:

To calculate the direct labor rate variance, we need to use the following formula:

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

Direct labor rate variance= (15.95 - 15.73)*11,000

Direct labor rate variance= $2,420 favorable

Actual rate= 173,030/11,000= $15.73