A job was budgeted to require 4 hours of labor per unit at $11.00 per hour. The job consisted of 7,000 units and was completed in 24,000 hours at a total labor cost of $312,900. What is the direct labor rate variance?

To calculate the direct labor rate variance, follow these steps:

Step 1: Calculate the standard labor cost per unit. This is given as 4 hours of labor per unit at $11.00 per hour. So, the standard labor cost per unit = 4 hours/unit *$11.00/hour = $44.00/unit.

Step 2: Calculate the total standard labor cost for the job. This is the standard labor cost per unit times the number of units. So, the total standard labor cost = $44.00/unit * 7,000 units =$308,000.

Step 3: Calculate the actual labor cost per hour. This is the total labor cost divided by the total labor hours. So, the actual labor cost per hour = $312,900 / 24,000 hours =$13.04/hour.

Step 4: Calculate the standard labor cost for the actual labor hours. This is the standard labor cost per hour times the actual labor hours. So, the standard labor cost for the actual labor hours = $11.00/hour * 24,000 hours =$264,000.

Step 5: Calculate the direct labor rate variance. This is the actual labor cost minus the standard labor cost for the actual labor hours. So, the direct labor rate variance = $312,900 -$264,000 = $48,900 unfavorable.

The direct labor rate variance is unfavorable because the actual labor cost is higher than the standard labor cost for the actual labor hours.