The algebraic equation for the direct labor rate variance is
A)direct labor rate variance = AQ × (AP - SP).
B)direct labor rate variance = SQ × (AP - SP).
C)direct labor rate variance = SP × (AQ - SQ).
D)direct labor rate variance = AP × (AQ - SQ).

Question

Quizplus · Accepted Answer

The standard cost for direct labor is calculated by multiplying the standard labor rate (SP) by the standard labor hours (SQ). The actual direct labor cost is calculated by multiplying the actual labor rate (AP) by the actual labor hours worked (AQ). The direct labor rate variance is the difference between the actual and standard labor rates, multiplied by the actual labor hours worked. Therefore, the algebraic equation for the direct labor rate variance is: Direct labor rate variance = AQ × (AP - SP).

The Algebraic Equation for the Direct Labor Rate Variance Is