If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed a:
A) variable variance
B) rate variance
C) quantity variance
D) volume variance

Question

Quizplus · Accepted Answer

A variance that arises due to differences in the wage rate paid per hour from the standard wage rate per hour for direct labor is called a rate variance. This variance measures the difference between the actual rate paid per hour and the standard rate per hour multiplied by the actual number of hours worked. The other options listed, variable variance, quantity variance, and volume variance, are not relevant to the situation described in the question.

If the Wage Rate Paid Per Hour Differs from the Standard