-Calculate the Direct Labor Rate Variance

question 95

Multiple Choice

-Calculate the direct labor rate variance.

• A) $4,488.75 unfavorable
• B) $6,851.25 favorable
• C) $4,488.75 favorable
• D) $6,851.25 unfavorable

---

Definitions:

Estimated Annual Costs

A forecast of the total costs a company expects to incur over a year, including fixed and variable expenses.

Expected Annual Activity

The anticipated level of operations or production for a business during a one-year period.

Predetermined Overhead Rate

A rate used to assign manufacturing overhead costs to products or job orders, calculated based on estimated overhead costs and an allocation base.

Direct Labor Cost

The total cost of work done by employees who are directly involved in the manufacturing of a product.