Custom Tile Works budgeted 2.5 hours of direct labor per unit at $12.20 per hour to produce 520 hand-painted mosaic tiles.The 520 tiles were completed using 1,400 hours of direct labor at $12.50 per hour.What is the direct labor price variance?

Question

Quizplus · Accepted Answer

Direct labor price variance = (Actual rate - Budgeted rate) x Actual hours

Budgeted rate = $12.20 per hour
Actual rate = $12.50 per hour
Actual hours = 1,400

Direct labor price variance = ($12.50 - $12.20) x 1,400 = $420 unfavorable.

Custom Tile Works Budgeted 2