Answer:
A. $4,225 Favorable
$1,150 Unfavorable
$3,075 Favorable
B. Higher; Less
Explanation:
Calculation to determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance.
A. Calculation for Direct Labor rate variance using this formula
Direct Labor rate variance = (Standard rate - Actual rate) * Actual hours
Let plug in the formula
Direct Labor rate variance=($23 - $22.50) * Direct Labor rate variance=8,450
Direct Labor rate variance=$0.50 * $8,450
Direct Labor rate variance=$4,225 Favorable
Calculation for Direct Labor time variance using this formula
Direct Labor time variance = (Standard hours - Actual hours) * Standard rate
Let plug in the formula
Direct Labor time variance=(8,400 - 8,450) * $23
Direct Labor time variance=-50 * $23
Direct Labor time variance= $1,150 Unfavorable
Calculation for Total direct labor cost variance using this formula
Total direct labor cost variance = Labor rate variance + Labor time variance
Let plug in the formula
Total direct labor cost variance=$4,225 + (-$1,150)
Total direct labor cost variance= $3,075 Favorable
B.The employees may have been less-experienced or poorly trained, thereby resulting in a HIGHER labor rate than planned. The lower level of experience or training may have resulted in more efficient performance. Thus, the actual time required was LESS than standard.
