Lemoine Corporation's standard wage rate is $11.50 per direct labor-hour (DLH) and according to the standards, each unit of output requires 5.5 DLHs. In February, 8,900 units were produced, the actual wage rate was $11.60 per DLH, and the actual hours were 51,210 DLHs. The Labor Rate Variance for February would be recorded as a:
A) debit of $5,121.
B) credit of $4,895.
C) credit of $5,121.
D) debit of $4,895.

Question

Quizplus · Accepted Answer

The Labor Rate Variance is calculated as (Actual Rate - Standard Rate) x Actual Hours. Here, it is ($11.60 - $11.50) x 51,210 = $5,121, which is unfavorable, hence a debit.

Lemoine Corporation's Standard Wage Rate Is $11