Let AR = actual hourly rate for direct labor, SR = the standard hourly rate, AH = the actual direct labor hours used, and SH = the standard direct labor hours for a given level of production. The direct labor rate variance equals

Question

Quizplus · Accepted Answer

The direct labor rate variance is calculated as the difference between the actual hourly rate and the standard hourly rate, multiplied by the actual hours worked, which is represented by AH × (AR - SR).

Let AR = Actual Hourly Rate for Direct Labor, SR