Labor Variances

Verde Company produces wheels for bicycles. During the year, 660,000 wheels were produced. The actual labor used was 364,000 hours at $9.40 per hour. Verde has the following labor standards: 1) $10.20 per hour; 2) 0.51 hour per wheel.

Required:

1. Compute the labor rate variance. $fill in the blank 1 Favorable

2. Compute the labor efficiency variance.