Chapter 9, Problem 8ME

To determine

Concept introduction:

Rate variance:

It is referred to as the amount which is computed by multiplying the number of actual hours with the difference between actual rate and standard rate per hour of direct labour.

Time variance:

It is referred to as the amount which is computed by multiplying the standard rate per hours with the difference between the number of actual hours and standard hours of direct labour.

Direct labour spending variance:

This is calculated by combining material price variance and material quantity variance.

To compute:

The direct labor rate, efficiency and spending variances.