Question
The firm's direct-labor rate variance was $4,800
unfavorable. Actual labor was 24,000 direct labor hours, at a cost of $168,000 for 25,000 units of finished product requiring 1 hour of direct labor each, at standard. What is the standard rate per direct labor hour?Solution
Answer: LRV =(Actual rate – Standard Rate) * actual hours Here, 4800 = (7- SR)*24000 which gives SR = 6.8/ hour.
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