the kitchen of the Ambience hotel in Australia gold cost has developed a strong local reputation for its pastries. It sells the pastries to the carefully chosen bakeries and also though one of its restaurant outlets. At the beginning of the current fiscal year, the company management established the standard that it should take the half of the labor time to produce one tray of pastries. It was also budgeted that labor should be paid at the rate pf $14 per hour. At the end of the January, the performance report for the kitchen revealed that 120 hours had been worked by the pastrys chefs. They were paid $1440 and had produced 220 trays of pastries.

Calculate the labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.