Question

The following labor standards have been established for a particular product:Standard labor-hours per unit of output 9.0hoursStandard labor rate$15.10per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 8100 hoursActual total labor cost$191,880 Actual output 800units What is the labor rate variance for the month

Answer 1

Direct labor rate variance= $69,579 unfavorable

Step-by-step explanation:

Giving the following information:

Standard labor-hours per unit of output 9.0 hours

Standard labor rate= $15.10 per hour

Actual hours worked= 8,100 hours

Actual total labor cost= $191,880

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

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

Actual rate= 191,880/8,100= $23.69 per hour

Direct labor rate variance= (15.10 - 23.69)*8,100

Direct labor rate variance= $69,579 unfavorable