The actual cost of direct labor per hour is $14.75. Two and one half standard direct labor hours are allowed per unit of finished goods. During the current period, 3400 units were produced using 8300 direct labor hours. The direct labor efficiency variance is $3100 favorable. Calculate the standard direct labor rate per hour.

Standard Rate per hour = $15.5 per hour

Explanation:

given data

actual cost = $14.75

current period = 3400 units

direct labor hours = 8300

direct labor efficiency variance = $3100

to find out

standard direct labor rate per hour

solution

we use here Direct Efficiency Variance formula that is

Direct Efficiency Variance = (Standard Hours - Actual Hours) * Standard Rate per Hour ... 1

put here value

3100 = [ (3400 * 2.5) - 8300 ] * Standard Rate per hour

solve it we get

Standard Rate per hour = $15.5 per hour