Question

Total Labour Cost Variance = _____________________.

• A. Standard Cost of Labour $-$ Actual Cost of Labour
• B. Standard Rate (Standard Time for Actual Output $-$ Actual Time Worked)
• C. Standard Rate (Standard Time for Actual Output $-$ Actual Time paid for)
• D. Actual Time taken (Standard Rate $-$ Actual Rate)

Answer 1

The correct option is A Standard Cost of Labour $-$ Actual Cost of Labour

The direct labor (DL) variance is the difference between the total actual direct labor cost and the total standard cost. If the total actual cost incurred is less than the total standard cost, the variance is favorable.

Total Labour cost variance =

=(Standard Rate* Standard Hr)-(Actual Rate*Actual Hr)

=Standard Labour Cost- Actual Labour Cost