Direct Labor Variances

The following data relate to labor cost for production of 5,600 cellular telephones:

Actual:	3,790 hrs. at $14.30
Standard:	3,730 hrs. at $14.60

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	$fill in the blank 1	FavorableUnfavorable
Time variance	$fill in the blank 3	FavorableUnfavorable
Total direct labor cost variance	$fill in the blank 5	FavorableUnfavorable

b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a

higherlower

labor rate than planned. The lower level of experience or training may have resulted in

moreless

efficient performance. Thus, the actual time required was

moreless

than standard.