The standard cost of direct labor per hour is $12.50.One and one half standard direct labor hours are allowed per unit of finished goods.During the current period,560 units were produced using 1,250 direct labor hours.The direct labor rate variance is $1,000 unfavorable.Calculate the actual cost of direct labor per hour.

Question

Quizplus · Accepted Answer

C)
Labor rate variance = (Actual rate per hour - Standard rate per hour)× actual hours
$1,000 = (Actual rate per hour - $12.50)× 1,250 hrs
Act rate = $16,625 / 1,250
= $13.30

The Standard Cost of Direct Labor Per Hour Is $12