Question

Accurate Tax Returns budgets two direct labor hours for every tax return that it​ prepares, at a standard cost of $ 34 an hour. During the most recent​ year, 530 returns were completed with the labor cost totaling $ 26 comma 000. The actual labor cost was $ 49.06 per hour during that period. The actual number of labor hours was 1 comma 000. What is the direct labor cost​ variance? A. $ 34 comma 000 U

Answer 1

Direct labor rate (cost) variance= $15,060 unfavorable

Step-by-step explanation:

Giving the following information:

Standard cost of $34 an hour.

The actual labor cost was $49.06 per hour during that period.

The actual number of labor hours was 1,000.

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

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

Direct labor rate variance= (34 - 49.06)*1,000

Direct labor rate variance= $15,060 unfavorable