Problem:
If the actual direct labor wage rate is $8.50 and 4,500 direct labor-hours were actually worked during the month. The standard direct labor wage rate is $8.00 and the standard quantity of hours allowed for the actual level of output was 5,000 direct labor-hours. What is the direct labor efficiency variance?
Required:
Question 1: What is the labor efficiency variance?
Question 2: What is the variable overhead efficiency variance if the standard variable overhead per direct labor-hour is $5.00?
Note: Please provide reasons to support your answer.