The following labor standards have been established for a particular product.

The following data pertain to operations concerning the product for the last month:

  1. What is the labor rate variance for the month?
  • $4,246 U
  • $4,246 F
  • $2,877 F
  • $1,295 F

Answer:

AH × AR = $50,690
Labor rate variance = (AH × AR) – (AH × SR)
= $50,690 – (3,700 hours × $14.05 per hour)
= $50,690 – ($51,985)
= $1,295 F

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