Direct Labor Variances

Direct Labor Variance Formula is also termed as direct labor rate variance. This variance measures any deviation from standard in the average hourly rate paid to direct labor workers. In other words, direct labor variance is the difference between the amount of actual hours worked at actual rate and actual hours worked at standard rate.Following formula is used to calculate direct labor rate variance or direct labor price variance: [Labor rate variance = (Actual hours worked × Actual rate) − (Actual hours worked × Standard rate)]