The difference between the actual labor rate and the standard labor rate,multiplied by the actual labor hours,is the:
A)direct labor spending variance.
B)direct labor volume variance.
C)direct labor rate variance.
D)direct labor efficiency variance.

Question

Quizplus · Accepted Answer

The formula given describes the direct labor rate variance, which measures the difference between the actual rate paid to workers and the standard rate expected to be paid, multiplied by the actual hours worked. This variance arises because of differences in wage rates, employee mix, or collective bargaining agreements, which affect the cost of labor per hour. Therefore, the correct answer is C - direct labor rate variance.

The Difference Between the Actual Labor Rate and the Standard