The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
-The direct labor rate variance is
A)$4,488.75 unfavorable
B)$6,851.25 favorable
C)$4,488.75 favorable
D)$6,851.25 unfavorable

Question

Quizplus · Accepted Answer

The direct labor rate variance is calculated as (Actual Rate - Standard Rate) * Actual Hours = ($12.25 - $12.00) * 17,955 = $0.25 * 17,955 = $4,488.75 unfavorable. This is because the actual rate is higher than the standard rate, leading to additional costs.

The Following Data Relate to Direct Labor Costs for March