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Question: United Tire Co. provides installation services for clients. The company developed the following standard costs for installing 4 tires: Cost Hours per Hour Total Cost $67.50 Direct labour 0.75 $90.00 The actual results for the year are: Units produced Direct labour hours used this year Actual labour rate per hour 6,200 4,340 $94.00 Required: Calculate the direct labour rate (also called price) and efficiency (also called usage) variances and use your solution to answer the following questions NOTE: Please enter all variances as positive numbers.
The amount of the direct labour rate variance, also called the direct labour price variance, is $ Indicate if the direct labour rate variance is favourable (enter the letter F) or unfavourable (enter the letters UF). AY The amount of the direct labour efficiency variance, also called the direct labour usage variance, is $ A Indicate if the direct labour efficiency variance is favourable (enter the letter F) or unfavourable (enter the letters UF). A/