Answer:
Direct labor rate variance= $20,700 unfavorable
Explanation:
Giving the following information:
Actual direct labor hours 34,500
Standard direct labor hours 35,000
Total actual direct labor cost $241,500
Direct-labor efficiency variance $3,200F
First, we need to calculate the standard hourly rate:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
3,200= (35,000 - 34,500)standard rate
3,200 = 500standard rate
$6.4 = standard rate
To calculate the direct labor rate variance, we need to use the following formula:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (6.4 - 7)*34,500
Direct labor rate variance= $20,700 unfavorable
Actual rate= 241,500 / 34,500= $7
