A popular product of Loring Glassworks is a hand-decorated vase. The company's standard cost system calls for 1.25 hours of direct labor per vase, at a standard wage rate of $14. During September, Loring produced 5,000 vases at an actual direct labor cost of $82,500 for 7,500 direct labor hours.
What is the actual wage rate per hour? Compute the labor rate and efficiency variances for the month. Was paying workers the actual wage rather than the standard wage an effective strategy for Loring?