Mike's Service Station performs oil changes for cars.Each oil change has a standard time of 0.5 direct labor hours.The standard direct labor hour rate is $15.00 per hour.Data relating to oil changes for the month of September follow:

What is the labor rate variance for September?

Question

Mike's Service Station performs oil changes for cars.Each oil change has a standard time of 0.5 direct labor hours.The standard direct labor hour rate is $15.00 per hour.Data relating to oil changes for the month of September follow:

What is the labor rate variance for September?

Quizplus · Accepted Answer

B)
Labor rate variance = (Actual rate per hour - Standard rate per hour)× actual hours
$750 F = ({$12,750 / 900} - $15.00)× 900

Mike's Service Station Performs Oil Changes for Cars