You have been given the following per unit information about the production of Gillian Ltd., and are asked to provide the plant manager with information for a meeting with the vice-president of operations with the following per unit data:

Direct Labour

Standard Quantity 1.5 hours

Standard Price $18 / hour

Actual Quantity 1.0 hours

Actual Price$16 / hour

Production data for the year is as follows:

DescriptionAmountActual production (units)40,000

Required:

Calculate the direct labour rate (also called price) and efficiency (also called usage) variances and use your solution to answer the following questions.

NOTE:Please enter all variances as positive numbers.

The amount of the direct labour rate variance, also called the direct labour price variance, is $____________.

Indicate if the direct labour rate variance is favourable (enter the letter F) or unfavourable (enter the letters UF).

The amount of the direct labour efficiency variance, also called the direct labour usage variance, is $____________.

Indicate if the direct labour efficiency variance is favourable (enter the letter F) or unfavourable (enter the letters UF).