The formula to compute the direct labor rate variance is to calculate the difference between
A) Actual Costs + (Actual Hours × Standard Rate)
B) Actual Costs - Standard Costs
C) (Actual Hours × Standard Rate) - Standard Costs
D) Actual Costs - (Actual Hours × Standard Rate)

Question

Quizplus · Accepted Answer

The direct labor rate variance is computed by subtracting the actual cost of labor from the amount that should have been incurred based on the standard rate multiplied by the actual hours worked. Therefore, the correct formula is Actual Costs - (Actual Hours × Standard Rate).

The Formula to Compute the Direct Labor Rate Variance Is