A favorable labor rate variance is created when:
A) actual labor hours worked exceed standard hours allowed.
B) actual hours worked are less than standard hours allowed.
C) actual wages paid are less than amounts that should have been paid for the number of hours worked.
D) actual units produced exceed budgeted production levels.
E) actual units produced exceed standard hours allowed.

Question

Quizplus · Accepted Answer

A favorable labor rate variance occurs when the actual wages paid for labor are less than what should have been paid based on the standard rate for the actual number of hours worked. This means the company paid less per hour than anticipated.

A Favorable Labor Rate Variance Is Created When