The labor rate variance (a price variance) plus the labor efficiency variance (a quantity variance) equals the total labor variance. Therefore, the total labor variance minus the labor efficiency variance must equal the labor rate (price) variance.
The labor rate variance (a price variance) plus the labor efficiency variance (a quantity variance) equals the total labor variance. Therefore, the total labor variance minus the labor efficiency variance must equal the labor rate (price) variance.
The labor rate variance (a price variance) plus the labor efficiency variance (a quantity variance) equals the total labor variance. Therefore, the total labor variance minus the labor efficiency variance must equal the labor rate (price) variance.
The labor rate variance (a price variance) plus the labor efficiency variance (a quantity variance) equals the total labor variance. The problem tells us that the total labor variance is ($15,000) favorable and the labor efficiency variance is $18,000 unfavorable. Therefore, the labor rate variance is (15,000) – 18,000 = (33,000). So the labor rate variance is ($33,000) favorable.
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