direct labor rate variance

The difference between the cost of a specific number of budgeted labor hours and the actual cost that was incurred. For example, if a company budgeted $20,000 for 1,000 hours to be spent manufacturing during the course of a month, but the actual cost of 1,000 hours of labor was $25,000, the direct labor rate variance is $5,000 ($25,000 - $20,000).