Direct Labor Variances The following data relate to labor cost for production of 4,000 cellular telephones Actual: Standard: 2,650 hr. at sis a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number Rate variance Time variance Total direct labor cost variance 2,690 hrs, at $14.7 Favorable Unfavorable Favorable b. The employees may have been less-experienced or poorly trained, thereby resulting in a lowerlabor rate than pianned. The lower level of experience or training may have resulted in less efficient performance. Thus, the actual time required was more than standard Feedbacx Check My Work Unfavorable variances can be thought of as increasing costs (a debit). Favorable varances can be thought of as decreasing costs (a credt) The labor cost variance is the difference between the actual and standard labor cost Consider Sactors affecting labor performance Leaming Objective 3