Data on Gantry Company's direct labor costs are given below: Standard direct-labor hours 46,000 Actual direct-labor hours 45,000 Direct-labor efficiency variance-favorable$4,800 Direct-labor rate variance-favorable$9,000 Total direct labor payroll$207,000 What was Gantry's standard direct labor rate

Answer

Standard labour rate per     = $4.8 per hour

Explanation

Labour efficiency variance is the difference between the actual time taken to achieve a given production output less the standard hours allowed for same multiplied by the standard labour rate

Standard labour rate = Efficiency variance/ Difference in hours

Difference in hours = Standard hour - Actual hours

                                 = 46,000 - 45,000

                                 = 1000 hours

Standard rate = 4,800/100o hours

                     = $4.8 per hour

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