Mandy Company has the following direct labor costs last month:
What was Mandy's direct labor rate variance?
A)$15,120 unfavorable.
B)$20,880 unfavorable.
C)$23,490 unfavorable.
D)$42,480 favorable.

Question

Mandy Company has the following direct labor costs last month: 
What was Mandy's direct labor rate variance?
A)$15,120 unfavorable. 
B)$20,880 unfavorable. 
C)$23,490 unfavorable. 
D)$42,480 favorable.

Quizplus · Accepted Answer

To calculate direct labor rate variance, we use the formula: (Actual Rate - Standard Rate) x Actual Quantity. 
The problem doesn't provide us with the standard rate, so we can't calculate the actual direct labor rate variance. However, we can assume that the actual rate is higher than the standard rate, given that all of the choices are unfavorable. 
Therefore, the best answer would be the choice with the highest amount, which is B.

Mandy Company Has the Following Direct Labor Costs Last Month