Use the following data to find the direct labor rate variance. $\begin{array}{llcc}
\text { Direct labor standard (4 hrs. @\$7/hr.) } & \text {\$ 28 per unit } \
\text { Actual hours worked per unit } & \text { 3.5 hours } \
\text { Actual units produced } & \text { 3,500 units } \
\text { Actual rate per hour } & \text { \$ 7.50 } \
\end{array}$

A)$6,125 unfavorable
B)$7,000 unfavorable
C)$7,000 favorable
D)$12,250 favorable
E)$6,125 favorable

Question

Use the following data to find the direct labor rate variance. $\begin{array}{llcc}
  \text { Direct labor standard (4 hrs. @\$7/hr.)  } & \text {\$ 28  per unit   }  \
 \text { Actual hours worked per unit  } & \text {  3.5  hours  }  \
 \text { Actual units produced  } & \text { 3,500 units  }  \
 \text { Actual rate per hour  } & \text { \$ 7.50    }  \
\end{array}$

A)$6,125 unfavorable
B)$7,000 unfavorable
C)$7,000 favorable
D)$12,250 favorable
E)$6,125 favorable

Quizplus · Accepted Answer

Direct labor rate variance = (Actual rate - Standard rate) x Actual hours worked

Standard rate = $7/hr
Actual rate = $7.50/hr
Actual hours worked per unit = 3.5 hrs
Actual units produced = 3,500 units

Direct labor rate variance = (7.50 - 7) x 3.5 x 3,500
= $6,125 unfavorable

Therefore, the correct answer is A) $6,125 unfavorable.

Use the Following Data to Find the Direct Labor Rate