b.

a.

Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows: Standard Rate Standard Standard Hours per Hour Cost 12 minutes (8.20 hours) $10.00 $2.00 During July, 2,150 hours of direct labour time were recorded to make 10,000 units. The direct labour cost totalled $21,070 for the month Requirect. 1-a. What direct labour cost should have been incurred to make the 10,000 speakers? (Do not round intermediate calculations.) Direct labour cost 1-b. By how much does direct labour cost differ from the cost that was incurred? (Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Total variance 2. Break down the difference in cost from requirement 1-above into a labour rate variance and a labour efficiency variance. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect fi.e., zero variance).) Labour rate variance Labour efficiency variance 3. The budgeted variable manufacturing overhead rate is $3.00 per direct labour hour. During July, the company incurred $6,880 in variable manufacturing overhead cost. Compute the variable overhead spending and efficiency variances for the month (Indicate the effect of each variance by selecting "F* for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Variable overhead spending variance Variable overhead eficiency variance