Calculating the Direct Labor Rate Variance and the Direct Labor Efficiency Variance

Guillermo's Oil and Lube Company is a service company that offers oil changes and lubrication for automobiles and light trucks. On average, Guillermo has found that a typical oil change takes $24$ minutes and $6\mathrm{.}2$ quarts of oil are used. In June, Guillermo's Oil and Lube had $980$ oil changes.

Guillermo's Oil and Lube Company provided the following information for the production of oil changes during the month of June:

Actual number of oil changes performed: $980$

Actual number of direct labor hours worked: $386$ hours

Actual rate paid per direct labor hour: $$14\mathrm{.}50$

Standard rate per direct labor hour: $$14\mathrm{.}00$

Required:

Calculate the direct labor rate variance $($LRV$)$ and the direct labor efficiency variance $($LEV$)$ for June using the formula approach.

Direct labor rate variance $($LRV$)$

$ $$ Unfavorable $$

Direct labor efficiency variance $($LEV$)$

$ $$

Favorable $$

$2.$ Calculate the total direct labor variance for oil changes for June.

$ $$ Unfavorable

$3.$ What if the actual wage rate paid in June was $$12\mathrm{.}40?$ What impact would that have had on the direct labor rate variance $(LRV?$ On the direct labor efficiency variance $($LEV$)?$ Indicate what the new variances would be below. If required, round your answers to the nearest cent.

Direct labor rate variance $($LRV$)$:

$ $$

$$

Direct labor efficiency variance $($LEV$)$:

$

Favorable