erde Company produces wheels for bicycles. During the year, 653,000 wheels were produced. The actual labor used was 364,000 hours at $9.60 per hour. Verde has the following labor standards: 1) $10.10 per hour; 2) 0.45 hour per wheel.

Required:

1. Compute the labor rate variance. $ Favorable

2. Compute the labor efficiency variance. $ Unfavorable