If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual is 600 hours at $17, the rate variance is $1,200 favorable.

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elisa baptiste · Accepted Answer

Final Answer : False, Explanation :  To calculate the rate variance, we need to compare the actual rate per hour with the standard rate per hour.Standard rate per hour = $15Actual rate per hour = $17The difference between these rates is unfavorable since the actual rate is higher than the standard rate.Formula for rate variance = (Actual rate - Standard rate) x Actual hours worked= ($17 - $15) x 600 = $1,200 unfavorableTherefore, the answer is B) False.

If the standard to produce a given amount of product is 500 direct labor hours at $15 and the actual is 600 hours at $17, the rate variance is $1,200 favorable.

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