Smallman’s Garage uses standards to plan and control labor time and expense. The standard time for an engine tune-up is 4 hours, and the standard labor rate is $20 per hour. Last week, 36 tune-ups were completed. The labor efficiency variance was 12 hours unfavorable, and the labor rate variance totaled $156 favorable.

Required:
a. Calculate the actual direct labor hourly rate paid for tune-up work last week.
b. Calculate the dollar amount of the labor efficiency variance.
c. What is the most likely explanation for these two variances? Is this a good trade-off for the management of the garage to make? Explain your answer.