The following data relate to direct labor costs for August:Actual costs: 5,500 hours at $24

Given information –

Actual direct labor rate $24.00

Actual hours                5,500

Standard labor rate     $23.70

Standard hours            5,000

Direct labor rate variance = actual cost – standard cost of actual hours

                                    = actual quantity (actual rate – standard rate)

                                    = 5,500 (24 – 23.70)

                                    = 5,500 x 0.30

                                    =$1,650 unfavorable

Likely reasons for unfavorable variance –

1. Unskilled employees
2. Inappropriate setting of standard

Option a is correct