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The Fellowes Company has developed standards for labor. During June, 85 units were scheduled and 110 were produced. Data related to labor are: Standard hours allowed 2 hours per unit Standard wages allowed $ 4.00 per hour Actual direct labor 230 hours (total cost $897) What is the labor rate variance for June?

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Answer:

Direct labor rate variance= 23 favorable

Explanation:

Giving the following information:

During June, 85 units were scheduled and 110 were produced. Data related to labor are: Standard hours allowed 2 hours per unit Standard wages allowed $ 4.00 per hour

Actual direct labor 230 hours for 897. (897/230= 3.9)

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

Direct labor rate variance= (4 - 3.9)*230= 23 favorable

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