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Eagle Company uses a standard cost system that has provided the following data: Units of output manufactured: 85 Direct labor: Standard hours allowed: 2 hours per unit of product Standard wage rate: $15.10 per hour Actual direct labor: 190 hours, total cost of $3,249 The direct labor rate variance for the period was:

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Answer:

$380 Unfavorable is correct

Explanation:

Solution

Given that:

The direct labor rate variance for the period is given below;

Labor rate (direct) variance = (standard rate-actual rate ) * Actual hours

Actual Rate = 3249/190 hr = 17.10

Thus,

Direct labor rate variance = (15.10-17.10)*190

=(-2) * 190

= -380 this is unfavorable

Therefore, the direct labor rate variance for the period was: $380 ( a negative sign) this implies that it is unfavorable.

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