A. The labor rate variance is calculated as follows: (Actual Rate - Standard Rate) × Actual Hours (i.e., actual units of input). All the components of the formula are in the data given. The actual rate is $18, and the standard rate is $20. The actual hours are 78,000. Thus, the variance is ($18 - $20) × 78,000 = $(156,000). The direct labor rate variance for April is favorable because the actual labor rate was less than the standard labor rate.
B. The labor rate variance is calculated as follows: (Actual Rate - Standard Rate) × Actual Hours (i.e., actual units of input). An answer of $40,000 results from using the formula (Standard Rate - Actual Rate) × Actual Units of Output.
C. The actual labor rate was less than the standard labor rate, which creates a favorable variance. See the correct answer for a complete explanation.
D. This is the direct materials efficiency variance. However, the question asks for the direct labor rate variance. See the correct answer for a complete explanation.
