If the actual average wage rate is $4.50 per direct labor hour,but the standard wage rate is $4.70 per direct labor hour,
A)the direct labor efficiency variance will be favorable.
B)the direct labor efficiency variance will be unfavorable.
C)the direct labor rate variance will be favorable.
D)the direct labor rate variance will be unfavorable.

Question

Quizplus · Accepted Answer

The direct labor rate variance is calculated as the difference between the actual wage rate and the standard wage rate, multiplied by the actual hours worked. Since the actual wage rate ($4.50) is less than the standard wage rate ($4.70), the variance is favorable.

If the Actual Average Wage Rate Is $4