6.-

Labor Variances

Verde Company produces wheels for bicycles. During the year, 662,000 wheels were produced. The actual labor used was 359,000 hours at $9.10 per hour. Verde has the following labor standards: 1) $10.30 per hour; 2) 0.46 hour per wheel.

Required:

1. Compute the labor rate variance. $fill in the blank 1

FavorableUnfavorable

2. Compute the labor efficiency variance. $fill in the blank 3

FavorableUnfavorable