A company manufactures one product and has a standard cost system. In April the company had the following experience:
　　Direct Materials Direct Labor
　　Actual $/unit of input (lbs. & hrs.) $28 $18
　　Standard price/unit of input $24 $20
　　Standard input allowed per unit of output 10 4
　　Actual units of input 190,000 78,000
　　Actual units of output 20,000 20,000
　　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.