4. At a sales level of 30,000 the budget data for labor is as follows: 40000 hours at $15 an hour. The actual data was 40000 hours at $11.25 an hour.

1. Compute the Labor Rate Variance.
2. Compute the Labor Efficiency Variance.

5. What do you think could have caused the Direct Materials amount to be so high? List as many reasons as you can. For each reason listed, tell what the company can do to correct the situation. Use complete sentences and good grammar.

6. Ending Finished Goods Inventory was supposed to be $200,000. It was actually $50,000. What could have caused inventory to be so low? What could be done to correct the situation? List as many reasons as you can. Use complete sentences and good grammar.