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30 November, 04:28

Dreidell Corporation expected to use 1.1 direct labor hours to produce one unit of their product, at a rate of $12/DLH. Actual results for last year indicate that they sold 420,000 units, where their direct labor workforce actually worked 500,000 hours at a rate of $13.25/DLH. What is the Direct Labor Rate Variance?

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  1. 30 November, 04:37
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    Direct Labor Rate Variance = $625000 unfavorable

    Explanation:

    given data

    standard rate = $12

    actual rate = $13.25

    actual hours = 500,000

    to find out

    What is the Direct Labor Rate Variance

    solution

    we get here Direct Labor Rate Variance that is express as

    Direct Labor Rate Variance = (standard rate - actual rate) * actual hours ... 1

    put here value we get

    Direct Labor Rate Variance = (12 - 13.25) * 500000

    Direct Labor Rate Variance = $625000 unfavorable
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