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
Calculate the direct labor rate variance.
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) x Actual Hours. Here, it is ($12.25 - $12.00) x 17,955 = $4,488.75 unfavorable.

The Following Data Relate to Direct Labor Costs for March