Question 2. The Walkabout Corporation manufactures boomerangs (its only product). The company's standards for manufacturing boomerangs are as follows:
Standard direct labor rate per hour
$ 18.50 per hour
Standard direct labor hours per boomerang
0.4 hours
During the month of January, the company produced 1,800 boomerangs. Actual production data for the month follows:
Actual direct labor hours worked
700 hours
Actual direct labor cost incurred
$ 14,000
Part A. Calculate the labor rate variance for the month. Is it favorable or unfavorable? Show your work.
Part B. Calculate the labor efficiency variance for the month. Is it favorable or unfavorable? Show your work.