Greasy Grimes is a chain of automotive repair shops owned by en- trepreneur Terrel Grimes. Grimes established the company during the 1960s to compete with local garages and the service departments of new car dealer- ships. In addition to performing basic oil change and lubrication services, Greasy Grimes' mechanics do major and minor repairs on engine, transmission, and brake systems. The company is unionized and has three labor classes, with the following wage rates:

Each shop has a manager who prepares cost estimates for customers and assigns jobs to mechanics. Labor estimates are prepared using a book that identifies the number of standard labor hours required to perform various repairs.
Grimes is reviewing a monthly report that summarizes the transmission service activities of shop 222. The shop recently had a change in management, and Grimes is anxious to evaluate the new manager's ability to use labor effectively. Relevant data are as follows:

Required Calculate the labor rate and labor efficiency variances for shop 222 during July and interpret your results.

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Apprentice mechanic Journeyman mechanic Master mechanic Hourly Rate $25 30 40