Alcalmaz Company uses standard costing and recorded the following data for the m

Question

Alcalmaz Company uses standard costing and recorded the following data for the month of August:
Standard direct labor rate $10.00 per hour Standard hours allowed for actual production 20,000 hours Actual direct labor rate $10.50 per hour Labor efficiency variance $5,000 favorable
How much is the labor rate variance for August? Answer                                                   A.            $0                             B.            $9,750 unfavorable.                             C.            $4,750 unfavorable.                             D.            $14,750 unfavorable. Alcalmaz Company uses standard costing and recorded the following data for the month of August:
Standard direct labor rate $10.00 per hour Standard hours allowed for actual production 20,000 hours Actual direct labor rate $10.50 per hour Labor efficiency variance $5,000 favorable
How much is the labor rate variance for August? Alcalmaz Company uses standard costing and recorded the following data for the month of August:
Standard direct labor rate $10.00 per hour Standard hours allowed for actual production 20,000 hours Actual direct labor rate $10.50 per hour Labor efficiency variance $5,000 favorable
How much is the labor rate variance for August? Standard direct labor rate $10.00 per hour Standard hours allowed for actual production 20,000 hours Actual direct labor rate $10.50 per hour Labor efficiency variance $5,000 favorable
How much is the labor rate variance for August? $0 $9,750 unfavorable. $4,750 unfavorable. $14,750 unfavorable. Standard direct labor rate $10.00 per hour Standard hours allowed for actual production 20,000 hours Actual direct labor rate $10.50 per hour Labor efficiency variance $5,000 favorable

Explanation / Answer

Labor Efficiency Variance = Standard Rate(Actual Hours Worked - Standard Hours Allowed)
-$5,000 = $10.00 X (Actual Hours Worked - 20,000)

-$500 = Actual Hours Worked - 20,000

Actual Hours Worked = 19,500

Labor Rate Variance = (Actual Rate - Standard Rate) x Actual Hours Worked

= ($10.50 - $10.00) X 19,500

=$9,750 Unfavorable---ANSWER

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