ImpressMe Products embosses notebooks with school and corporate logos. Last year, the company's direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour. Calculate ImpressMe's direct labor rate variance. (Round answer to 0 decimal places, e. g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

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Business

Sterling Obrien

28 January, 06:46

ImpressMe Products embosses notebooks with school and corporate logos. Last year, the company's direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour. Calculate ImpressMe's direct labor rate variance. (Round answer to 0 decimal places, e. g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

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Jermaine · Answer 1

Direct labor rate variance = $12,575 unfavorable

Explanation:

Giving the following information:

Last year, the company's direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour.

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

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

Actual rate = 352,100/50,300 = $7 per hour

Direct labor rate variance = (6.75 - 7) * 50,300

Direct labor rate variance = $12,575 unfavorable