Labor Variances
Lightnin' Slow Co. has developed a new puzzle called the Brainbuster. The company has a standard cost system to help control costs and has established the following standards for the Brainbuster.
Direct labor: 0.6 hours per puzzle at $14.00 per hour.
During that very same, very mild August in Atlanta, Lightnin' Slow Co. actually produced 5,000 Brainbuster puzzles. These 5,000 puzzles used 3,200 direct labor hours at a total cost of $48,000.
Required: Compute the Direct labor rate and efficiency variances. Use the back of your answer sheet.