Based on the following information, calculate the direct labor rate variance. ? $$\begin{array} { l l }
\text { Actual rate } & 2,500 \text { hours at } \$ 15.00 \
\text { Standard rate } & 2,650 \text { hours at } \$ 15.50
\end{array}$$
A) 1,250 favorable
B) 1,000 unfavorable
C) 2,500 favorable
D) 1,300 unfavorable

Question

Based on the following information, calculate the direct labor rate variance. ? $$\begin{array} { l l } 
\text { Actual rate } & 2,500 \text { hours at } \$ 15.00 \
\text { Standard rate } & 2,650 \text { hours at } \$ 15.50
\end{array}$$
A) 1,250 favorable
B) 1,000 unfavorable
C) 2,500 favorable
D) 1,300 unfavorable

Quizplus · Accepted Answer

The direct labor rate variance is calculated as (Actual Hours x Actual Rate) - (Actual Hours x Standard Rate). Here, it is (2,500 hours x $15.00) - (2,500 hours x $15.50) = $37,500 - $38,750 = $1,250 favorable.

Based on the Following Information, Calculate the Direct Labor Rate