Direct Labor Variances

The following data relate to labor cost for production of 6,800 cellular telephones:

Actual:	4,580 hrs. at $12.80
Standard:	4,510 hrs. at $13.00

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	Favorable
Time variance	$fill in the blank 3	Unfavorable
Total direct labor cost variance	$fill in the blank 5	Favorable

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.