(Direct labor variances) In auditing the inventory account of a client, the account¬ ing firm of Porter & Co., CPAs, set the following standard: 200 hours at an hourly rate of $24.50. The firm actually worked 190 hours auditing inventory. The total labor variance for the inventory audit was $40 unfavorable.

a. Compute the total actual payroll.

b. Compute the labor efficiency variance.

c. Compute the labor rate variance.

d. Offer a brief explanation that is consistent with the two variances.

LO1