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Direct labor rate variance. The total actual direct labor cost and total standard direct labor cost may be computed as follows.

Allocation Of Direct Labor

The direct labor rate variance refers to the variance that arises due to the difference between the standard and actual wage paid per hour of direct labor.

Direct labor rate variance. This result means the company incurs an additional 3 600 in expense by paying its employees an average of 13 per hour rather than 12. The calculator processes the above three inputs and generates a favorable or unfavorable direct labor rate variance figure as output. Direct labor rate variance is equal to the difference between actual hourly rate and standard hourly rate multiplied by actual hours worked.

This variance is also known as direct labor price variance. If the total actual cost incurred is less than the total standard cost the variance is favorable. The direct labor dl variance is the difference between the total actual direct labor cost and the total standard cost.

Outputs to be generated. Direct labor rate variance is the measure of difference between the actual cost of direct labor and the standard cost of direct labor utilized during a period. Direct labor rate variance.

The number of hours actually worked during a particular period of time the time for which the variance is to be calculated. To compute the direct labor price variance subtract the actual hours of direct labor at standard rate 43 200 from the actual cost of direct labor 46 800 to get a 3 600 unfavorable variance.