Northeast Music, a harmonica manufacturer, uses standard costs to judge performance. Recently, a clerk mistakenly threw away some of the records, and the manager has only partial data for February. She knows that the direct labour flexible budget variance for the month was $390 F and that the standard labour price was $9 per hour. A recent pay cut caused a favourable labour price variance of $0.50 per hour. The standard direct labour hours for actual February output were 5,200. Requirements 1. Find the actual number of direct labour hours worked during February. First, find the actual direct labour price per hour. Then, determine the actual number of direct labour hours worked by setting up the computation of the direct labour flexible budget variance of $390 F. 2. Compute the direct labour price and efficiency variances. Do these variances suggest that the manager may have made trade-offs? Explain. Requirement 1. Find the actual number of direct labour hours worked during February. First, find the actual direct labour price per hour. Then, determine the actual number of direct labour hours worked by setting up the computation of the direct labour flexible budget variance of $390 F. Select the formula, then calculate the actual price per hour. = Actual direct labour price per hour Determine the actual number of direct labour hours worked by setting up the computation of the direct labour flexible budget variance of $390 F. (Enter in the known amounts, then determine the missing amounts to solve for the actual direct labour hours. Enter the amounts as positive numbers. Label the variance as favourable (F) or unfavourable (U).) Northeast Music Schedule to Compute Actual Direct Labour Hours Direct labour hours Actual Flexible budget for actual output budget variance Flexible Cost per hour Total direct labour cost Flexible budget variance Requirement 2. Compute the direct labour price and efficiency variances. Do these variances suggest that the manager may have made trade-offs? Explain. Begin by determining the formula for the price variance, then compute the price variance for direct labour. (Enter the result as positive number. Label the variance as favourable (F) or unfavourable (U).) )x )x Price variance Now determine the formula for the efficiency variance, then compute the efficiency variance for direct labour. (Enter the result as positive number. Label the variance as favourable (F) or unfavourable (U).) )x Do these variances suggest that the manager may have made trade-offs? Explain. The direct labour price variance combined with the However, due to the overall net effect, it appears there was = Efficiency variance = direct labour efficiency variance suggests that the manager may have used workers