The following direct labor standards have been established for product O64L:
The following data pertain to last month's operations:
Required:a. What was the labor rate variance for the month?b. What was the labor efficiency variance for the month?

a. Labor rate variance = (Actual hours × Actual rate) − (Actual hours × Standard rate)= $78,540 − (6,600 hours × $12.80 per hour)= $78,540 − $84,480= $5,940 Favorable
b. Standard hours = Standard hours per unit × Actual output = 7.2 hours per unit × 900 units = 6,480 hoursLabor efficiency variance = (Actual hours − Standard hours) × Standard rate= (6,600 hours − 6,480 hours) × $12.80 per hour= 120 hours × $12.80 per hour= $1,536 Unfavorable