Paradise Corp. has determined a standard labor cost per unit of $10.20 (1 hour * $10.20 per hour). Last month, Paradise incurred 1,650 direct labor hours for which it paid $16,005. The company also produced and sold 1,700 units during the month.

Calculate the direct labor rate, efficiency, and spending variances. (Round your intermediate calculations to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)

Direct Labor Rate Variance

Direct Labor Efficiency Variance

Total Direct Labor Spending Variance

Direct Labor Rate Variance = $825 favorable

Direct Labor Efficiency Variance = $510 favorable

Total Direct Labor Spending Variance = $1,335 favorable

Explanation:

The computations are shown below:

Direct Labor Rate Variance

= (Standard rate - Actual rate) * Actual hours

= ($10.20 - $16,005 : 1,650 labor hours) * 1,650 direct labor hours

= ($10.20 - $9.7) * 1,650 direct labor hours

= $825 favorable

Direct Labor Efficiency Variance

= (Standard Hours allowed - Actual hours) * Standard rate

= (1,700 units * 1 hour - 1,650 hours) * $10.20

= (1,700 hours - 1,650 hours) * $10.20

= $510 favorable

Total Direct Labor Spending Variance

= Standard cost - actual cost

= 1,700 hours * $10.20 - $16,005

= $17,340 - $16,005

= $1,335 favorable