The standard cost of direct labour per hour is $10.00. Two standard direct labour hours are allowed per finished good. During the current period, 512 finished goods were produced using 1,000 direct labour hours. The direct labour price variance is $100, unfavourable. Calculate the actual cost of direct labour per hour.

Question

Quizplus · Accepted Answer

Direct labour price variance = (Actual labour rate - Standard labour rate) x Actual hours worked
-100 = (Actual labour rate - 10) x 1000
Actual labour rate = $10.10 ($0.10 higher than the standard rate)

Therefore, the actual cost of direct labour per hour is $10.10. Choice C is the correct answer.

The Standard Cost of Direct Labour Per Hour Is $10