Data on Gantry Company's direct labor costs are given below:
$\begin{array}{lrr}
\text { Standard direct-labor hours } & & 30,000 \
\text { Actual direct-labor hours } & & 29,000 \
\text { Direct-labor efficiency variance-favorable } & \$ & 4,000 \
\text { Direct-labor rate variance-favorable } & \$ & 5,800 \
\text { Total direct labor payroll } & \$ & 110,200
\end{array}$

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What was Gantry's actual direct labor rate?
A) $3.60
B) $3.80
C) $4.00
D) $5.80

Question

Data on Gantry Company's direct labor costs are given below:
$\begin{array}{lrr}
\text { Standard direct-labor hours } & & 30,000 \
\text { Actual direct-labor hours } & & 29,000 \
\text { Direct-labor efficiency variance-favorable } & \$ & 4,000 \
\text { Direct-labor rate variance-favorable } & \$ & 5,800 \
\text { Total direct labor payroll } & \$ & 110,200
\end{array}$

-
What was Gantry's actual direct labor rate?
A) $3.60
B) $3.80
C) $4.00
D) $5.80

Quizplus · Accepted Answer

The actual direct labor rate can be calculated by dividing the total direct labor payroll by the actual direct-labor hours: $110,200 / 29,000 hours = $3.80 per hour.

Data on Gantry Company's Direct Labor Costs Are Given Below