A. cost is unfavourable
B. variance is unfavourable
C. variance is favourable
D. cost is favourable
✅ The correct answer is option B.
An actual rate paid to labour is greater than budgeted rate, it means that the variance is unfavourable, the variance is unfavorable since the company paid more than what it expected. A price variance is the difference between the actual revenue or cost and the budgeted revenue or cost because of a difference between the actual unit price and the budgeted unit price.
An actual rate paid to labour is greater than budgeted rate, it means that the variance is unfavourable, the variance is unfavorable since the company paid more than what it expected. A price variance is the difference between the actual revenue or cost and the budgeted revenue or cost because of a difference between the actual unit price and the budgeted unit price.