During October,10,000 direct labour hours were worked at a standard cost of $10 per hour.If the direct labour rate variance for October was $4,000 unfavourable,what would be the actual cost per direct labour hour?
A)$9.20
B)$9.60
C)$10.00
D)$10.40

Question

Quizplus · Accepted Answer

The direct labour rate variance is calculated as (Actual Hourly Rate - Standard Hourly Rate) x Actual Hours Worked. Given an unfavourable variance of $4,000, this means the actual cost was higher than the standard. The variance of $4,000 divided by the 10,000 hours worked equals $0.40, which is the difference per hour between the actual and standard rates. Therefore, the actual cost per hour is $10.40 ($10 + $0.40).

During October,10,000 Direct Labour Hours Were Worked at a Standard