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The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $117,600 for 6,000 direct labor hours worked, the direct labor rate variance is
Question 7 options:
a. $3,000 unfavorable.
b. $2,400 favorable.
c. $2,400 unfavorable.
d. $3,000 favorable.

Respuesta :

hamzatauseef

Answer:

B) $2400 Favorable

Explanation:

This can be calculated using the following formula

Labor rate variance =  (Standard rate * Actual hours) - (Actual Labor cost)

this follows as,

Variance = ($20 * 6000 hours) - $117,600 = $2400

Since the standard budgeted cost is more than actual spent, there is a favorable variance.

Hope that helps.