Problem:
James has the following information pertaining to its usage of direct labor in a recent period:
Total direct labor hours spent 30,000
Total units manufactured 8,000
Actual wage rate per hour $16
Standard cost data
Wage rate per hour $18
Standard hours per unit 4
Required: Calculate the following variances (be sure to indicate whether the variance is favorable or unfavorable).
(A) Direct labor efficiency variance
(B) Direct labor rate variance