OBJECTIVE (5) Exercise 10-14 Labour Variances CORNERSTONE 10.6 Hobby Company produces sails for small recreational sailboats. During the year, 120,000 sails CPA 3.2.3; 3.6.3 were produced. The actual labour used was 178,000 hours at $15.20 per hour. Hobby has the following labour standard: 1.5 hours at $14.80. Required: 1. Compute the labour rate variance. 2. Compute the labour efficiency variance