Gotay Corporation's standard wage rate is $12.00 per direct labor-hour (DLH)and according to the standards,each unit of output requires 5.8 DLHs.In December,4,900 units were produced,the actual wage rate was $11.00 per DLH,and the actual hours were 27,870 DLHs.The Labor Rate Variance for December would be recorded as a:
A)debit of $28,420.
B)credit of $28,420.
C)credit of $27,870.
D)debit of $27,870.

Question

Quizplus · Accepted Answer

Labor rate variance = AH(AR - SR)
= 27,870 hours ($11.00 per hour - $12.00 per hour)
= 27,870 hours (-$1.00 per hour)= $27,870 F

Gotay Corporation's Standard Wage Rate Is $12