Question：

 

　　A company manufactures one product and has a standard cost system. In April the company had the following experience:
 

 

 

　　The direct labor rate variance for April is

 

　　A. $240,000 favorable.

 

　　B. $156,000 favorable.

 

　　C. $156,000 unfavorable.

 

　　D. $40,000 unfavorable.

 

　　Answer（B）：

 

　　Answer (A) is incorrect. The direct materials efficiency variance is $240,000 favorable.

 

　　Answer (B) is correct. The direct labor rate variance equals the actual amount of labor used times the standard rate minus the actual rate. The variance is $156,000 favorable [78,000 × ($20 – $18)]. The variance is favorable because the actual rate was less than the standard rate.

 

　　Answer (C) is incorrect. The variance was favorable.

 

　　Answer (D) is incorrect. Multiplying the actual units of output by the difference between the actual rate and standard rate results in $40,000.