Direct labor rate variance

Direct labor rate variance this variance tells managers how much of the total labor variance is due to paying a higher or lower hourly wage rate than anticipated. It is calculated as follows: AH X (AR - SR).

Definitions

According to Managerial Accounting by Braun, Tietz (5th edition),

Direct labor rate variance. This variance tells managers how much of the total labor variance is due to paying a higher or lower hourly wage rate than anticipated. It is calculated as follows: AH X (AR - SR).