30 A favorable labor rate variance indicates that SolutionTh

30 A favorable labor rate variance indicates that

Solution

The Answer is “ The standard rate exceeds the actual rate ”

A favorable labor rate variance indicates that the standard rate exceeds the actual rate.

The Labor rate variance = Actual Hours x [ Actual Rate – Standard Rate ]

If the Standard labor rate is greater than the Actual labor rate, then the Labor rate variance would be Favorable (F) and if the Standard labor rate is less than the Actual labor rate, then the Labor rate variance would be Unfavorable (U)