Question

MC Qu. 144 The following labor standards...

The following labor standards have been established for a particular product:

  

Standard labor-hours per unit of output	7.9	hours
Standard labor rate	$15.45	per hour

  

The following data pertain to operations concerning the product for the last month:

  

Actual hours worked	10,000	hours
Actual total labor cost	$152,100
Actual output	1,150	units

  

What is the labor rate variance for the month?

Answer 1

Answer:

Labor Rate Variance = (AH * AR) – (AH * SR)       
Labor Rate Variance = $152,100 – (10,000 * $15.45)
Labor Rate Variance = $152,100 - $154,500
Labor Rate Variance = $2,400 Favourable