The Fellowes Company has developed standards for labor. During June, 85 units were scheduled and 110 were produced. Data related to labor are: Standard hours allowed 2 hours per unit Standard wages allowed $ 4.00 per hour Actual direct labor 230 hours (total cost $897) What is the labor rate variance for June?

Direct labor rate variance = 23 favorable

Explanation:

Giving the following information:

During June, 85 units were scheduled and 110 were produced. Data related to labor are: Standard hours allowed 2 hours per unit Standard wages allowed $ 4.00 per hour

Actual direct labor 230 hours for 897. (897/230 = 3.9)

Direct labor rate variance = (Standard Rate - Actual Rate) * Actual Quantity

Direct labor rate variance = (4 - 3.9) * 230 = 23 favorable