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Labor Rate and Efficiency Variances Keck Company's direct labor costs to manufacture its only product in October follow:
Standard direct labor hours per unit of product
1.5
Number of finished units produced
10,000
Standard wage rate per direct labor hour
$16
Total payroll for direct labor
$207,000
Wage paid per direct labor hour
$18
Differences in hourly wage rates reflect skill levels of workers.
Required: Determine the following for October:
1. Direct labor rate variance.
2. Direct labor efficiency variance.
3. Production manager's performance in managing direct labor costs.
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