Boulette and Girls Inc. manufactures the famous cowboy boots that bear his name. The company uses a standard cost system. It established the standard cost per pair of boots as follows:

Raw material: 7 leather slats at $15 per latte	$105.00
Direct labour: 3 hours at $16 per hour	$48.00
Variable indirect manufacturing costs: 3 hours to $5	$15.00
Total	$168.00

Variable indirect manufacturing costs are charged on the basis of direct labour hours.

Boulette and Girls Inc. manufactured 8,500 units in the past year. It purchased 59,600 leather slats at a unit purchase cost of $14.50. The purchasing department normally buys the amount of raw materials required for production. Thus, there is no need to maintain stocks of raw materials. The direct labour was paid a total of 21,800 hours during the year at an average hourly rate of $16.80. Finally, the actual variable indirect manufacturing costs were $104,675 for the same period.

(2 points)Calculate the difference in direct labour rates and specify whether the difference is

favourable or unfavourable.

Difference in direct labour rate:

Gap