How is the direct labor rate variance calculated?
A)The difference between the standard labor rate and the actual labor rate multiplied by the actual labor hours used
B)The difference between the standard labor rate and the actual labor rate multiplied by the standard allowable hours
C)The difference between the standard labor hours and the allowable labor hours
D)The difference between the standard labor rate and the actual labor rate

Question

Quizplus · Accepted Answer

The direct labor rate variance is calculated by taking the difference between the standard labor rate and the actual labor rate, then multiplying that difference by the actual labor hours used. This measures how much the actual labor rate deviates from what was expected or budgeted, adjusted for the actual amount of labor used.

How Is the Direct Labor Rate Variance Calculated