Hollowell Audio, Inc., manufactures military-specification compact discs. The company uses standards to control its costs. The labor standards that have been set for one disc are as follows: Standard Hours 6 minutes Standard Rate per Hour $24.00 Standard Cost $2.40 During July, 2,125 hours of direct labor time were required to make 20,000 discs. The direct labor cost totaled $49,300 for the month. Required: 1. According to the standards, what direct labor cost should have been incurred to make the 20,000 discs? By how much does this differ from the cost that was incurred? Number of units manufactured Standard labor time per unit Total standard hours of labor time allowed Standard direct labor rate per hour Total standard direct labor cost Actual direct labor cost Standard direct labor cost Spending variance-Unfavorable LO 2. Break down the difference in cost from (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Labor rate variance Labor efficiency variance 3. The budgeted variable manufacturing overhead rate is $16.00 per direct labor-hour. During July, the company incurred $39,100 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Variable overhead rate variance Variable overhead efficiency variance