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Calculating the Direct Labor Rate Variance and the Direct Labor Efficiency Variance
Guillermo's Oil and Lube Company is a service company that offers oil changes and lubrication for automobiles and light trucks. On average, Guillermo has found that a typical oil change takes 24 minutes and 6.2 quarts of oil are used. In June, Guillermo's Oil and Lube had 980 oil changes.
Guillermo's Oil and Lube Company provided the following information for the production of oil changes during the month of June:
Actual number of oil changes=980
Actual number of direct labor hrs worked=386
Actual rate paid per direct labor hr=$14.50
Standard rate per direct labor hour=$14.00
Calculate total direct labor variance for oil changes in June?
Calculate The Direct Labor Rate Variance (LRV) and Direct Labor efficiency variance (LEV)
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