Answer:
Direct Labor Rate Variance = $825 favorable
Direct Labor Efficiency Variance = $510 favorable
Total Direct Labor Spending Variance = $1,335 favorable
Explanation:
The computations are shown below:
Direct Labor Rate Variance
= (Standard rate - Actual rate) × Actual hours
= ($10.20 - $16,005 ÷ 1,650 labor hours) × 1,650 direct labor hours
= ($10.20 - $9.7) × 1,650 direct labor hours
= $825 favorable
Direct Labor Efficiency Variance
= (Standard Hours allowed - Actual hours) × Standard rate
= (1,700 units × 1 hour - 1,650 hours) × $10.20
= (1,700 hours - 1,650 hours) × $10.20
= $510 favorable
Total Direct Labor Spending Variance
= Standard cost - actual cost
= 1,700 hours × $10.20 - $16,005
= $17,340 - $16,005
= $1,335 favorable
