# ECONOMICS

## COST ACCOUNTING

### STANDARD COSTING

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
If:the standard direct labor rate was RM10 per hour;the direct labor rate variance amounted to RM450 favorable; andthe actual direct labor cost amounted to RM39, 550.The actual direct labor hours worked were:
 A 3, 955 hours B 4, 500 hours C 3, 910 hours D 4, 000 hours
Explanation:

Detailed explanation-1: -The formula for this variance is:(standard hours allowed for production – actual hours taken) × standard rate per direct labour hour.

Detailed explanation-2: -The direct labor rate variance compares the actual rate per hour of direct labor to the standard rate per hour of labor for the hours worked.

Detailed explanation-3: -A direct labor rate is calculated simply by dividing the estimated total labor cost by the total direct labor hours.

Detailed explanation-4: -It is calculated as: (Expected direct labour hours of actual output ÷ actual direct labour hours worked) × 100%.

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