Answer:
The correct answer is B.
Explanation:
Giving the following information:
Standard hours per unit= 2 hours
Standard labor hour rate= $5 per hour
Units produced= 100 units
The actual number of hours= 240 hours
Total labor cost= $1,176
To determine the direct labor rate variance, we need to use the following formula:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Standard rate= $5
Actual rate= 1,176/240= $4.9
Actual quantity= 240 hours
Direct labor rate variance= (5 - 4.9)*240= $24 favorable
It is favorable because the actual rate was lower than estimated.
