If the actual rate per direct labor-hour exceeds the standard rate per direct labor-hour,then the journal entry to record the Direct Labor Rate Variance would be a credit.

Question

Quizplus · Accepted Answer

If the actual rate per direct labor-hour exceeds the standard rate per direct labor-hour, it means that the actual costs were higher than the planned or budgeted costs, resulting in an unfavorable variance. The Direct Labor Rate Variance is calculated by multiplying the difference between the actual labor rate and the standard labor rate by the actual quantity of hours worked. Since the variance is unfavorable, the journal entry would be a debit to increase the Direct Labor Expense account to reflect the additional costs incurred.

If the Actual Rate Per Direct Labor-Hour Exceeds the Standard