Question

Eagle Company uses a standard cost system that has provided the following data: Units of output manufactured: 80 Direct labor: Standard hours allowed: 2 hours per unit of product Standard wage rate: $15.50 per hour Actual direct labor: 180 hours, total cost of $3,150 The direct labor rate variance for the period was:

Answer 1

Answer:

Direct labor rate variance= $360 unfavorable

Explanation:

Giving the following information:

Standard wage rate: $15.50 per hour

Actual direct labor: 180 hours, total cost of $3,150

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

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

Actualr ate= 3,150/180= $17.5

Direct labor rate variance= (15.5 - 17.5)*180

Direct labor rate variance= $360 unfavorable