Response to the following problem:
Adam's Shades manufactures lamp shades. The manager uses standard costs to judge performance. Recently, a clerk mistakenly threw away some of the records, and the manager has only partial data for March. The manager knows that the direct labor flexible budget variance for the month was $1,050 U and that the standard labor price was $9 per hour. The shop experienced an unfavorable labor price variance of $0.50 per hour. The standard direct labor hours for actual March output were 4,000.
Required:
1. Find the actual number of direct labor hours worked during March. First, find the actual direct labor price per hour. Then, determine the actual direct labor hours by setting up the computation of the direct labor flexible budget variance of $1,050 U.
2. Compute the direct labor price and efficiency variances. Do these variances suggest the manager may have made any trade-offs? Explain.