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25 July, 13:02

Belle Auto Detailing reported the following results for the past week: Actual number of cars detailed 250 Actual direct labor hours used 625 Actual total direct labor cost $6,500 Budgeted number of cars to be detailed 300 Standard direct labor cost per hour $10 Standard direct labor per car 1.5 What is Belle's direct labor rate variance? $250 unfavorable $150 unfavorable $150 favorable $250 favorable

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  1. 25 July, 15:36
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    The correct answer is A.

    Explanation:

    Giving the following information:

    Actual number of cars detailed 250

    Actual direct labor hours used 625

    Actual total direct labor cost $6,500

    Budgeted number of cars to be detailed 300

    Standard direct labor cost per hour $10

    Standard direct labor per car 1.5

    Direct labor rate variance = (Standard Rate - Actual Rate) * Actual Quantity

    Direct labor rate variance = (10 - 10.4) * 625 = $250 unfavorable
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