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Direct Labor Variances

The following data relate to labor cost for production of 4,600 cellular telephones:

Actual:	3,100 hrs. at $12.60
Standard:	3,050 hrs. at $12.90

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	FavorableUnfavorableFavorable
Time variance	$fill in the blank 3	FavorableUnfavorableUnfavorable
Total direct labor cost variance	$fill in the blank 5	FavorableUnfavorableFavorable

b. The employees may have been less-experienced or poorly trained, thereby resulting in a

higherlowerlower

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

morelessless

efficient performance. Thus, the actual time required was

morelessmore

than standard.