The algebraic equation for the direct labor rate variance is A)direct labor rate variance = AQ x AP - SP. B)direct labor rate variance = SQx AP - SP. C)direct labor rate variance = SP x AQ - SQ. D)direct labor rate variance = AP x AQ - SQ.

Question

Quizplus · Accepted Answer

The direct labor rate variance is calculated by subtracting the standard (or budgeted) rate from the actual rate and multiplying the difference by the actual hours worked. Therefore, the equation for the direct labor rate variance is (AQ x AP) - (AQ x SP), which simplifies to AQ(AP - SP).

The Algebraic Equation for the Direct Labor Rate Variance Is