The correct answer is: C. (Standard wage rate – Actual wage rate) Ã Actual hours worked
The labor rate variance is the difference between the actual wage rate and the standard wage rate, multiplied by the actual hours worked. It measures the difference between the actual cost of labor and the standard cost of labor, due to a difference in wage rates.
Option A is incorrect because it calculates the labor cost variance, which is the difference between the actual labor costs and the standard labor costs.
Option B is incorrect because it calculates the labor efficiency variance, which is the difference between the actual hours worked and the standard hours worked, multiplied by the standard wage rate.
Option D is incorrect because it calculates the labor usage variance, which is the difference between the standard hours worked and the actual hours worked, multiplied by the standard wage rate.