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16 October, 02:41

Accurate Tax Returns budgets two direct labor hours for every tax return that it prepares, at a standard cost of $ 34 an hour. During the most recent year, 530 returns were completed with the labor cost totaling $ 26 comma 000. The actual labor cost was $ 49.06 per hour during that period. The actual number of labor hours was 1 comma 000. What is the direct labor cost variance? A. $ 34 comma 000 U

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  1. 16 October, 03:08
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    Direct labor rate (cost) variance = $15,060 unfavorable

    Explanation:

    Giving the following information:

    Standard cost of $34 an hour.

    The actual labor cost was $49.06 per hour during that period.

    The actual number of labor hours was 1,000.

    To calculate the direct labor rate (cost) variance, we need to use the following formula:

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

    Direct labor rate variance = (34 - 49.06) * 1,000

    Direct labor rate variance = $15,060 unfavorable
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