To calculate the direct labor rate variance and direct labor efficiency variance for General Electric Company, we use the following information:

Standard labor hours per unit: 3 hours
 Standard labor rate: $20 per hour
 Actual units produced: 6,000 units
 Actual labor hours worked: 18,500 hours
 Actual labor rate: $19 per hour

Direct Labor Rate Variance Calculation:

Direct Labor Rate Variance measures the difference between the actual rate paid and the standard rate per hour, multiplied by the actual hours worked.

Step 1: Calculate the standard cost for actual hours worked. Standard labor cost = Standard rate × Actual hours worked
 Standard labor cost = $20 × 18,500 hours
 Standard labor cost = $370,000

Step 2: Calculate the actual cost for actual hours worked. Actual labor cost = Actual rate × Actual hours worked
 Actual labor cost = $19 × 18,500 hours
 Actual labor cost = $351,500

Step 3: Calculate the Direct Labor Rate Variance. Direct Labor Rate Variance = Actual labor cost - Standard labor cost
 Direct Labor Rate Variance = $351,500 - $370,000
 Direct Labor Rate Variance = -$18,500

Interpretation:
 A negative variance indicates that the actual labor rate paid ($19 per hour) is lower than the standard labor rate ($20 per hour), resulting in a favorable variance of $18,500.

Direct Labor Efficiency Variance Calculation:

Direct Labor Efficiency Variance measures the difference between the actual hours worked and the standard hours allowed for the actual output, multiplied by the standard rate per hour.

Step 1: Calculate the standard hours allowed for actual output. Standard hours allowed = Standard hours per unit × Actual units produced
 Standard hours allowed = 3 hours/unit × 6,000 units
 Standard hours allowed = 18,000 hours

Step 2: Calculate the standard cost for actual output. Standard labor cost for actual output = Standard rate × Standard hours allowed
 Standard labor cost for actual output = $20 × 18,000 hours
 Standard labor cost for actual output = $360,000

Step 3: Calculate the Direct Labor Efficiency Variance. Direct Labor Efficiency Variance = Standard labor cost for actual output - Standard labor cost
 Direct Labor Efficiency Variance = $360,000 - $370,000
 Direct Labor Efficiency Variance = -$10,000

Interpretation:
 A negative variance indicates that more hours were worked (18,500 hours) compared to the standard hours allowed for the actual output (18,000 hours), resulting in an unfavorable variance of $10,000.

Summary:

• Direct Labor Rate Variance: -$18,500 (Favorable)
• Direct Labor Efficiency Variance: -$10,000 (Unfavorable)

These variances provide insights into how efficiently General Electric Company utilized labor compared to the standard set for production.