The price variance for direct manufacturing labor is referred as ___________?
Correct answer: A. rate variance
- A. rate variance
- B. direct variance
- C. labor variance
- D. manufacturing variance
Explanation
For direct manufacturing labor, the price variance measures the difference between the actual and standard hourly wage rate. It is therefore called the labor rate variance, or simply rate variance.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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