The following data relate to direct labor costs for the current period:Standard costs6,000 hours at $12.00Actual costs7,500 hours at $11.40What is the direct labor rate variance?
A) $18,000 unfavorable
B) $4,500 favorable
C) $17,100 unfavorable
D) $3,600 favorable

Question

The following data relate to direct labor costs for the current period:Standard costs6,000 hours at $12.00Actual costs7,500 hours at $11.40​What is the direct labor rate variance?
A) $18,000 unfavorable
B) $4,500 favorable
C) $17,100 unfavorable
D) $3,600 favorable

Quizplus · Accepted Answer

The direct labor rate variance is calculated as (Actual Hourly Rate - Standard Hourly Rate) x Actual Hours Worked. Here, it is ($11.40 - $12.00) x 7,500 = -$0.60 x 7,500 = -$4,500, which is favorable because the actual rate is less than the standard rate.

The Following Data Relate to Direct Labor Costs for the Current