Answer (C) 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 (A) is incorrect because The direct materials efficiency variance is $240,000 favorable.
Answer (B) is incorrect because The variance was favorable.
Answer (D) is incorrect because Multiplying the actual units of output by the difference between the actual rate and standard rate results in $40,000.
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The direct labor rate variance for April is