Question

    The standard cost of labour for 1 unit is 2 hours at

    ₹50 per hour. Actual production is 100 units and actual labour cost is ₹11,000 for 200 hours. What is the labour rate variance?
    A ₹1,000 (A) Correct Answer Incorrect Answer
    B ₹1,000 (F) Correct Answer Incorrect Answer
    C ₹500 (F) Correct Answer Incorrect Answer
    D ₹500 (A) Correct Answer Incorrect Answer

    Solution

    LRV = Actual hours × (Standard rate – Actual rate) = 200 × (50 – 11,000/200) = 200 × (50 – 55) = –₹1,000 = ₹1,000 Adverse

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