Abuja Foods Plc employs 80 workers on a standard rate of ₦1,500 per hour. The standard hours allowed per unit of output is 3 hours. In May 2024, actual output was 900 units, workers were paid ₦1,600 per hour, and they worked 2,850 actual hours. What is the Labour Rate Variance?

Labour Rate Variance = (Standard Rate – Actual Rate) × Actual Hours Worked = (₦1,500 – ₦1,600) × 2,850 = –₦100 × 2,850 = ₦285,000 Adverse. The variance is adverse because workers were paid ₦100 more per hour than the standard rate. This could indicate unplanned overtime, use of higher-grade labour, or wage rate increases not reflected in the standard.