Brandenburg and Fontaine Limited produced and sold 1350 units of their BF322 product in October 20X4.Each unit was budgeted to use 1.5 hours of labour at a standard cost of £11.60 per hour.When the company's management accountant reviewed the records for the month he found that 1.6 labour hours had been used in actual production, at an actual cost of £11.55 per hour. What was the labour rate variance for October 20X4?

Question

Quizplus · Accepted Answer

The labour rate variance is calculated as (Standard Rate - Actual Rate) x Actual Hours. Here, it is (£11.60 - £11.55) x (1350 units x 1.6 hours) = £0.05 x 2160 = £108 Favorable (F).

Brandenburg and Fontaine Limited Produced and Sold 1350 Units of Their