Direct Labor Variances

The following data relate to labor cost for production of 5,900 cellular telephones:

Actual:	3,990 hrs. at $16.10	$64,239
Standard:	3,930 hrs. at $16.40	$64,452

a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter all values as a positive number and then identify the variance (e.g. Favorable or Unfavorable) in the adjacent column.

Rate variance	$
Time variance	$
Total direct labor cost variance	$

b. The employees may have been less-experienced or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard.