Direct Labor Variances Tip Top Corp. produces a product that requires 3 standard hours per unit at a standard hourly rate of $18 per hour. If 5,400 units required 16,700 hours at an hourly rate of $17.1 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct labor rate variance b. Direct labor time variance c. Direct labor cost variance Favorable Unfavorable Favorable Feedback Check My Work Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit). The labor cost variance is the difference between the actual and standard labor cost. Leaming Objective 3.