ICAEW BIP · Chapter 9 · Question 4 of 13
Employees were paid for 5,200 hours at a total cost of £85,280. The standard rate is £16 per hour. What is the labour rate variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) £2,080 adverse
Explanation
Standard cost of hours paid = 5,200 x £16 = £83,200. Actual cost = £85,280. Rate variance = £83,200 - £85,280 = £2,080 adverse. The rate variance is based on all hours paid, including any idle time.
More Standard costing and variance analysis MCQs
- Q6Variable production overheads are absorbed at a standard rate of £5 per labour hour worked. In the period, 4,900 labour hours were worked…
- Q7Budgeted fixed production overheads are £120,000 and budgeted output is 10,000 units. Fixed overheads are absorbed per unit. Actual output…
- Q8A company sold 4,600 units for total revenue of £262,200. The standard selling price is £55 per unit. What is the sales price variance?
- Q9Budgeted sales were 5,000 units and actual sales were 4,600 units. The standard contribution is £22 per unit and the standard profit is…
- Q10A company reports a favourable material price variance and an adverse material usage variance. Which of the following is the most likely…