Paradise Corp has determined a standard labor cost per unit

Paradise Corp. has determined a standard labor cost per unit of $10.0?(1 hour × $10.00 per hour). Last month, Paradise incurred 1,600 direct labor hours for which it paid S!5,200. The company also produced and sold 1,650 units during the month. Calculate the direct labor rate, efficiency, and spending variances. (Round your intermediate calculations to 2 decimal places. Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable.) Direct Labor Rate Variance Direct Labor Efficiency Variance Total Direct Labor Spending Variance; 800F

Solution

Direct labour rate variance = (Standard rate-actual rate)actual hours

= (10*1600-15200)

Direct labour rate variance = 800 F

Direct labour efficiency variance = (Standard hour-actual hour)Standard rate

= (1650-1600)*10

Direct labour efficiency variance = 500 F

Direct labour spending variance = Standard cost-actual cost

= (1650*10)-15200

DIrect labour spending variance = 1300 F