Frames Incorporated budgeted one and one half hours of direct labor per unit at $10.75 per hour to produce 550 units of product. The 550 units were completed using 1650 hours of direct labor at $11.25 per hour. What is the direct labor rate variance?
A)$275 favorable
B)$825 favorable
C)$275 unfavorable
D)$825 unfavorable

Question

Quizplus · Accepted Answer

The direct labor rate variance is calculated as (Actual Rate - Standard Rate) x Actual Hours. Here, (11.25 - 10.75) x 1650 = $825 unfavorable.

Frames Incorporated Budgeted One and One Half Hours of Direct