Asked by Bianca LaForteza on Apr 29, 2024
Verified
If the actual hourly rate is greater than the standard hourly rate, the labor rate variance is labeled unfavorable (U).
Labor Rate Variance
The difference between the actual cost of direct labor and the expected (or standard) cost, calculated as (Actual rate - Standard rate) x Actual hours.
Standard Hourly Rate
The predetermined cost per hour for labor, used in budgeting and costing to assign labor costs to products and services.
- Investigate the role of employee compensation rates on differences in costs and efficiency in operations.
Verified Answer
JB
Jaquaisha BroadhurstMay 05, 2024
Final Answer :
True
Explanation :
This is correct. An unfavorable labor rate variance means that the actual hourly rate paid was higher than the standard rate, which can result in additional costs for the company.
Learning Objectives
- Investigate the role of employee compensation rates on differences in costs and efficiency in operations.
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