Paradise Corp. has determined a standard labor cost per unit of $9.20 (1 hour ×

Question

Paradise Corp. has determined a standard labor cost per unit of $9.20 (1 hour × $9.20 per hour). Last month, Paradise incurred 1,450 direct labor hours for which it paid $12,615. The company also produced and sold 1,500 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

Explanation / Answer

Direct Labor Rate Variance =12615-(1450*9.2)= $725 F Direct Labor Efficiency Variance =9.2*(1450-1500*1)= $460 F Total Direct Labor Spending Variance =12615-(1500*9.2)= $1185 F

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