The algebraic equation for the direct labor rate variance is A)Direct labor rate variance = AQ x AP - SP. B)Direct labor rate variance = SQx AP - SP. C)Direct labor rate variance = SP x AQ - SQ. D)Direct labor rate variance = AP x AQ - SQ.

Question

Quizplus · Accepted Answer

The equation for the direct labor rate variance is Direct labor rate variance = (Actual Labor Hours x Actual Labor Rate) - (Standard Labor Hours x Standard Labor Rate). This can be simplified to Direct labor rate variance = AQ x AP - SQ x SP. Therefore, the correct equation is A) Direct labor rate variance = AQ x AP - SP.

The Algebraic Equation for the Direct Labor Rate Variance Is