The following data relate to direct labor costs for the current period: Standard costs
6,000 hours at $12.00
Actual costs
7,500 hours at $11.40
The direct labor rate variance is
A)$18,000 unfavorable
B)$4,500 favorable
C)$17,100 unfavorable
D)$3,600 favorable

Question

Quizplus · Accepted Answer

The direct labor rate variance is calculated as (Actual Hourly Rate - Standard Hourly Rate) x Actual Hours Worked. Here, it is ($11.40 - $12.00) x 7,500 = -$0.60 x 7,500 = -$4,500, which is favorable because the actual rate is less than the standard rate.

The Following Data Relate to Direct Labor Costs for the Current