Given the following information in standard costing:
$$\begin{array} { | l | l | }
\hline \text { Standard } & 16,000 \text { hours at } \$ 4.00 \
\hline \text { Actual } & 15,800 \text { hours at } \$ 4.20 \
\hline
\end{array}$$
What is the direct labor rate variance?
A) $3,160 favorable.
B) $3,160 unfavorable.
C) $2,360 favorable.
D) $2,360 unfavorable.

Question

Given the following information in standard costing:
$$\begin{array} { | l | l | } 
\hline \text { Standard } & 16,000 \text { hours at } \$ 4.00 \
\hline \text { Actual } & 15,800 \text { hours at } \$ 4.20 \
\hline
\end{array}$$
What is the direct labor rate variance?
A) $3,160 favorable.
B) $3,160 unfavorable.
C) $2,360 favorable.
D) $2,360 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 (15,800 x $4.20) - (15,800 x $4.00) = $66,360 - $63,200 = $3,160 unfavorable.

Given the Following Information in Standard Costing What Is the Direct Labor Rate Variance? A) $3,160 Favorable

Given the Following Information in Standard Costing What Is the Direct Labor Rate Variance?
A) $3,160 Favorable