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Green Toys is a regional manufacturer of baby toys produced from plastic derived from organic and nontoxic sources. Management budgeted onehalf hour of direct labor per toy at a standard rate of per hour. The most current production run produced toys and used labor hours at a total cost of . What is the direct labor rate variance for this production​ run?

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Answer:

$11,400 unfavorable

Explanation:

some information was missing:

standard labor hours = 0.5 hours per toy

standard labor rate = $19

total production = 1,650 toys

total labor cost = $47,500

actual labor hours = 1,900

actual labor rate = $47,500 / 1,900 hours = $25

direct labor rate variance = (AR – SR) x AH = ($25 - $19) x 1,900 = $6 x 1,900 = $11,400 unfavorable (since actual labor costs were higher than standard labor costs)

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