The labor rate variance measures whether the rate paid to employees is more or less than the company's standard rate.

Question

Quizplus · Accepted Answer

The labor rate variance is calculated by subtracting the actual labor rate paid to employees from the standard rate and multiplying by the actual hours worked. A positive labor rate variance means the actual rate paid was higher than the standard rate, and a negative variance means the actual rate paid was lower than the standard rate.

The Labor Rate Variance Measures Whether the Rate Paid to Employees