Accounting Multiple Choice Question – 26 February 2021

The standard time for a job is set at 50 hours. The standard direct labour rate is £8.00 per hour.

The job was completed in 65 hours at a direct labour cost of £455.

What is the direct labour rate variance?

Select ONE answer:

1. £55 adverse
2. £55 favourable
3. £65 adverse
4. £65 favourable 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £455 / 65 = £7 ==> £8 – £7 * 65 hours = £65 FAV

This work is licensed under a Creative Commons Attribution 4.0 International License.