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Direct Labor Variances The following data relate to labor cost for production of 5,200 cellular telephones: Actual: Standard: 3,520 hrs. at $13.20 3,460 hrs.

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Direct Labor Variances The following data relate to labor cost for production of 5,200 cellular telephones: Actual: Standard: 3,520 hrs. at $13.20 3,460 hrs. at $13.40 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 704 X Favorable Time variance 804 Unfavorable Total direct labor cost variance 100 Unfavorable b. The employees may have been less-experienced or poorly trained, thereby resulting in a lower labor rate than planned. The lower level of experience or training may have resulted in less efficient performance. Thus, the actual time required was more than standard.

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