Direct labor rate variance
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Direct labor rate variance this variance tells managers how much of the total labor variance is due to paying a higher or lower hourly wage rate than anticipated. It is calculated as follows: AH X (AR - SR).
Definitions
According to Managerial Accounting by Braun, Tietz (5th edition),
- Direct labor rate variance. This variance tells managers how much of the total labor variance is due to paying a higher or lower hourly wage rate than anticipated. It is calculated as follows: AH X (AR - SR).
