Actual hours used 5,500; Standard hours allowed 5,800; Actual labor rate $14.75 per hour; and Standard labor rate $14.00 per hour. The labor rate variance is

1. Break Down the Problem

To calculate the labor rate variance, we need the following information:

• Actual Hours Used (AH) = 5,500 hours
• Standard Hours Allowed (SH) = 5,800 hours (not needed for labor rate variance calculation)
• Actual Labor Rate (AR) = $14.75 per hour
• Standard Labor Rate (SR) = $14.00 per hour

2. Relevant Concepts

The formula for labor rate variance (LRV) is: $LRV = (AR - SR) \times AH$

3. Analysis and Detail

We will substitute the known values into the labor rate variance formula: $LRV = (14.75 - 14.00) \times 5500$ Calculating the difference in rates: $14.75 - 14.00 = 0.75$ Now, we calculate the variance: $LRV = 0.75 \times 5500 = 4125$

4. Verify and Summarize

The labor rate variance is calculated to be $4,125. This indicates that the actual labor cost was higher than the standard cost, leading to an unfavorable variance.

Final Answer

The labor rate variance is $4,125 (Unfavorable).