Question

The following labor standards have been established for a particular product: Standard labor-hours per unit of output 8.6 hours Standard labor rate $ 15.80 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 10,700 hours Actual total labor cost $ 167,455 Actual output 1,500 units What is the labor rate variance for the month

Answer 1

the labor rate variance for the month is $1,605 favorable

Step-by-step explanation:

The computation of the labor rate variance for the month is shown below:

= Actual labor cost - (standard rate × actual hours)

= $167,455 - ($15.80 × 10,700 hours)

= $167,455 - $169,060

= $1,605 favorable

hence, the labor rate variance for the month is $1,605 favorable