Question - Connell manufactures specialty electronic circuitry through a unique photo-electronic process. One of the primary products, Model GT40, has a standard labor time of 0.5 hour and a standard labor rate of $7.00 per hour. During March, the following activities pertaining to direct labor for GT40 were recorded:
Direct labor hours used 2,000
Direct labor cost $12,000
Units of GT40 manufactured 3,000
Calculate both the labor rate and the labor efficiency variances. Indicate whether they are Favorable or Unfavorable.