The Wright Company has a standard costing system. The following data are available for September:
Actual quantity of direct labor hours.................................................................................... 
20,000 hours 
Standard price of direct labor.................................................................................... 
$5 per hour 
Total labor variance ……………………………………. 
$7,000, favorable 
Labor efficiency variance.................................................................................... 
$9,000, unfavorable 
The actual price (rate) per hour of direct labor is:
A. 
$5.10 

B. 
$4.90 

C. 
$4.20 

D. 
$6.20 

E. 
$5.80 
Labour Efficiency Variance  Actual Hours*Standard Rate Standard Hours* Standard Rate  
$9,000  =  20000*5SH*5  
5*Standard Hours =  1000009000  
5*Standard Hours =  91000  
Standard Hours  91000/5  
18200  Hours  
Total Labour Variance  Standard Rate*Standard Hours Actual Rate*Actual Hours  
$7,000  =  5*18200 AR*20000  
20000*Actual Rate  =  $91000$7000  
20000*Actual Rate  =  $84,000  
Actual Rate  =  $84000/20000  
Actual Rate  =  $4.20 per hours  
The Correct answer is C. $4.20  
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