The direct labour rate variance can be expressed as:
A) Actual hours x (actual rate - standard rate)
B) Standard rate x (actual hours - standard hours)
C) Actual hours x (standard rate x standard hours)
D) Standard rate x (actual hours/standard hours)

Question

Quizplus · Accepted Answer

The direct labour rate variance measures the difference between the actual cost of labour used and the expected or standard cost of labour. It is calculated by multiplying the actual hours worked by the difference between the actual rate paid and the standard rate. Therefore, the formula A (actual hours x (actual rate - standard rate)) correctly expresses the direct labour rate variance.

The Direct Labour Rate Variance Can Be Expressed As