The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows: The direct labor rate variance is
A) $2,960 unfavorable
B) $4,500 favorable
C) $2,960 favorable
D) $4,500 unfavorable

Question

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows:  The direct labor rate variance is
A) $2,960 unfavorable 
B) $4,500 favorable 
C) $2,960 favorable 
D) $4,500 unfavorable

Quizplus · Accepted Answer

Direct labor rate variance = (actual rate - standard rate) x actual hours
Standard rate = $12 per hour
Actual rate = $13 per hour
Actual hours = 6,250 hours (2,500 units x 2.5 standard hours per unit)

Direct labor rate variance = ($13 - $12) x 6,250 hours
Direct labor rate variance = $2,960 favorable

The Standard Costs and Actual Costs for Direct Labor for the Manufacture