Direct Labor Variances
Dvorak Company produces a product that requires 3 standard hours per unit at a standard hourly rate of $17 per hour. If 1,000 units required 2,800 hours at an
hourly rate of $16.50 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) total direct labor cost variance? Enter a favorable variance as a
negative number using a minus sign and an unfavorable variance as a positive number.
a. Direct labor rate variance
$
3,400
Favorable
b. Direct labor time variance
$
3,400
Favorable
c. Total direct labor cost
$
variance
4,800
Favorable