The formula to calculate the Labor Rate Variance (LRV) is:
\[ LRV = H \cdot (AR - SR) \]
Where:
A labor rate variance is a measure between the total amount paid for labor and the standard amount paid.
Let's assume the following values:
Using the formula:
\[ LRV = 40 \cdot (25 - 20) = 40 \cdot 5 = 200 \]
The Labor Rate Variance (LRV) is $200.
