To compute the direct labor rate variance and direct labor efficiency variance, let's break the calculations down step by step based on the given data:

Definitions:

1. Direct Labor Rate Variance (DLRV): $\text{DLRV} = (\text{AR} - \text{SR}) \times \text{AH}$

   • AR (Actual Rate): $14.10
   • SR (Standard Rate): $14.00
   • AH (Actual Hours): 29,700 hours

2. Direct Labor Efficiency Variance (DLEV): $\text{DLEV} = (\text{AH} - \text{SH}) \times \text{SR}$

   • AH (Actual Hours): 29,700 hours
   • SH (Standard Hours): 24,900 hours
   • SR (Standard Rate): $14.00

Step 1: Calculate Direct Labor Rate Variance

$\text{DLRV} = (14.10 - 14.00) \times 29,700$ $\text{DLRV} = 0.10 \times 29,700 = 2,970 \, \text{(Unfavorable)}$

Step 2: Calculate Direct Labor Efficiency Variance

$\text{DLEV} = (29,700 - 24,900) \times 14.00$ $\text{DLEV} = 4,800 \times 14.00 = 67,200 \, \text{(Unfavorable)}$

Results:

1. Direct Labor Rate Variance: $2,970 (Unfavorable)
2. Direct Labor Efficiency Variance: $67,200 (Unfavorable)
3. Total Direct Labor Variance: $2,970 + $67,200 = $70,170 (Unfavorable)

Let me know if you have further questions or if you'd like a detailed explanation of any of the calculations!

Expanding Questions:

1. How do you compute the direct materials price and quantity variances?
2. Why is it important to analyze labor efficiency variances in manufacturing?
3. Can a company have favorable rate variance but unfavorable efficiency variance? Provide examples.
4. How does variance analysis help in budgeting and controlling costs?
5. What strategies can a company implement to address unfavorable variances?

Tip:

Always cross-check actual and standard rates or hours carefully when calculating variances, as small differences can significantly impact the results.