A favorable labor rate variance indicates that d) the standard rate exceeds the actual rate.
To explain, a labor rate variance occurs when the actual labor costs differ from the expected (standard) labor costs for a given level of activity. When we say the variance is favorable, it means that the company is spending less on labor than what was budgeted. This happens when the actual rate that is paid to workers is lower than the standard rate that was originally set. Thus, when the standard rate is greater than the actual rate, the variance is favorable, indicating efficient use of labor resources.