The labor rate variance is computed by
A) (Actual Rate * Actual Hours) - (Standard Rate * Standard Hours).
B) (Standard Rate * Actual Rate) - (Actual Rate * Actual Hours).
C) (Actual Rate * Standard Hours) - (Standard Rate *Actual Hours).
D) (Actual Rate * Actual Hours) - (Standard Rate * Actual Hours).
E) None of these.

Question

Quizplus · Accepted Answer

The labor rate variance is calculated by comparing the actual cost of labor (actual rate times actual hours) to what the labor should have cost at the standard rate (standard rate times actual hours). This is accurately represented in option D.

The Labor Rate Variance Is Computed by