Below are standard and actual labor data for the current month for Zellner Compa

Question

Below are standard and actual labor data for the current month for Zellner Company.The company produced 1,000 units

Standard direct labor cost per unit

2 hours at $15.00 per hour

Actual data for current month

Employees worked 1,800 hours at $16.00 per hour

The labor rate variance is:

Below are standard and actual labor data for the current month for Zellner Company.The company produced 1,000 units

Standard direct labor cost per unit

2 hours at $15.00 per hour

Actual data for current month

Employees worked 1,800 hours at $16.00 per hour

The labor rate variance is:

Explanation / Answer

SRSH                                              SRAH                                                               ARAH

      2000 x 15                                                  1800 x 15                                                        1800 x 16

         =30,000                                                  = 27,000                                                           = 28,800

SR = Standard Rate = $ 15

SH = Standard Hours for Actual Production = 1000 x 2 =2,000

AH = Actual Hours = 1800

AR = Actual Rate =16

Labour Rate Variance = SRAH – ARAH = 27,000 – 28,800

= -1,800   [U]

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