Dreidell Corporation expected to use 1.1 direct labor hours to produce one unit of their product, at a rate of $12/DLH. Actual results for last year indicate that they sold 420,000 units, where their direct labor workforce actually worked 500,000 hours at a rate of $13.25/DLH. What is the Direct Labor Rate Variance?

Question

Business

Zechariah

17 August, 15:46

Dreidell Corporation expected to use 1.1 direct labor hours to produce one unit of their product, at a rate of $12/DLH. Actual results for last year indicate that they sold 420,000 units, where their direct labor workforce actually worked 500,000 hours at a rate of $13.25/DLH. What is the Direct Labor Rate Variance?

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Answers (1)

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Jasmine Beltran · Answer 1

Direct Labor Rate Variance = $625000 unfavorable

Explanation:

given data

standard rate = $12

actual rate = $13.25

actual hours = 500,000

to find out

What is the Direct Labor Rate Variance

solution

we get here Direct Labor Rate Variance that is express as

Direct Labor Rate Variance = (standard rate - actual rate) * actual hours ... 1

put here value we get

Direct Labor Rate Variance = (12 - 13.25) * 500000

Direct Labor Rate Variance = $625000 unfavorable