The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows:Standard CostsDirect labor7,500 hours @ $11.80Actual CostsDirect labor7,400 hours @ $11.40The direct labor rate variance is
A) $2,960 unfavorable
B) $4,500 favorable
C) $2,960 favorable
D) $4,500 unfavorable

Question

Quizplus · Accepted Answer

The direct labor rate variance is calculated as (Actual Rate - Standard Rate) x Actual Hours = (11.40 - 11.80) x 7,400 = -$0.40 x 7,400 = -$2,960, which is favorable because the actual rate is less than the standard rate.

The Standard Costs and Actual Costs for Direct Labor for the Manufacture