The standard rate of pay is $10 per direct labor hour. If the actual direct labor payroll was $39,200 for 4,000 direct labor hours worked, the direct labor price (rate) variance is
A) $800 unfavorable.
B) $800 favorable.
C) $1,000 unfavorable.
D) $1,000 favorable.

Question

Quizplus · Accepted Answer

The actual rate per hour is $39,200 / 4,000 = $9.80. The standard rate is $10. The variance is ($10 - $9.80) * 4,000 = $800 favorable.

The Standard Rate of Pay Is $10 Per Direct Labor