Flexible Budget & Standard Costing for Direct Labor Rate Variance & Efficiency Variances (Based On Standard Costing System with a Flexible Budget), setting up the formulas based on actual costs, flexible budget & static (standard) costs used to calculate the variances (1) Direct Labor Rate (Price) Variance = (Actual hours worked × Actual rate) (-) (Actual hours worked × Standard rate), (2) Direct Labor Efficiency Variance = (Actual hours worked × Standard rate) (-) (Standard hours allowed × Standard rate), example traces the variances thru T-accounts with associated formulas, detailed calculations & explanation by Allen Mursau
