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6 November, 20:57

he following labor standards have been established for a particular product: Standard labor-hours per unit of output 8.9 hours Standard labor rate $ 15.80 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 8,800 hours Actual total labor cost $ 136,400 Actual output 870 units What is the labor rate variance for the month

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  1. 6 November, 22:16
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    Direct labor rate variance = $2,640 favorable

    Explanation:

    Giving the following information:

    Standard labor rate $ 15.80 per hour

    Actual hours worked 8,800 hours

    Actual total labor cost $ 136,400

    To calculate the direct labor rate variance, we need to use the following formula:

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

    Actual rate = 136,400/8,800 = $15.5

    Direct labor rate variance = (15.8 - 15.5) * 8,800 = $2,640 favorable
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