Question

The following data are given for Harry Company: Budgeted production 1,088 units Actual production 946 units Materials: Standard price per ounce $1.976 Standard ounces per completed unit 11 Actual ounces purchased and used in production 10,718 Actual price paid for materials $21,972 Labor: Standard hourly labor rate $14.96 per hour Standard hours allowed per completed unit 4.2 Actual labor hours worked 4,872 Actual total labor costs $79,170 Overhead: Actual and budgeted fixed overhead $1,091,000 Standard variable overhead rate $28.00 per standard labor hour Actual variable overhead costs $136,416 Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.) The direct labor rate variance is a.$19,730.93 favorable b.$6,284.88 favorable c.$19,730.93 unfavorable d.$6,284.88 unfavorable

Answer 1

Direct labor rate variance= $6,284.88 unfavorable

Step-by-step explanation:

Giving the following information:

Standard hourly labor rate is $14.96 per hour

Actual labor hours worked 4,872

Actual total labor costs $79,170

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= (14.96 - 16.25)*4,872

Direct labor rate variance= $6,284.88 unfavorable

Actual rate= 79,170 / 4,872= $16.25