Gainer Corporation's standard wage rate is $11.70 per direct labor-hour (DLH) and according to the standards, each unit of output requires 3.9 DLHs. In February, 7,800 units were produced, the actual wage rate was $12.50 per DLH, and the actual hours were 29,940 DLHs. The Labor Rate Variance for February would be recorded as a:
A)debit of $23,952.
B)credit of $23,952.
C)credit of $24,336.
D)debit of $24,336.

Question

Quizplus · Accepted Answer

The Labor Rate Variance is calculated as (Actual Rate - Standard Rate) x Actual Hours. Here, it is ($12.50 - $11.70) x 29,940 = $23,952, which is unfavorable, hence recorded as a debit.

Gainer Corporation's Standard Wage Rate Is $11