The labour rate variance is calculated as
A) (Actual hourly wage rate - Standard hourly wage rate) x Actual direct labour hours used
B) (Actual hourly wage rate - Standard hourly wage rate) x Standard direct labour hours that should have been used
C) (Actual direct labour hours used - Standard direct labour hours that should have been used) x Actual hourly wage rate
D) (Actual direct labour hours used - Standard direct labour hours that should have been used) x Standard hourly wage rate

Question

Quizplus · Accepted Answer

The labour rate variance is calculated as the difference between the actual hourly wage rate and the standard hourly wage rate, multiplied by the actual direct labour hours used. This measures how much the actual labour cost per hour differs from what was expected or budgeted.

The Labour Rate Variance Is Calculated as