Answer and Explanation:
The computation is shown below:
1
Labor efficiency variance = Labor spending variance+Labor rate variance
= $450 + $500
= $950U
Now as we know that
Labor efficiency variance = SR × (AH-SH)
950 = $38 × (AH - 58 × 2.50)
950 = $38 × (AH - 145)
25 = AH - 145
AH = 145 + 25
= 170
Actual labor hours = 170 hours
2
Labor rate variance = AH × (SR-AR)
450 = 170 × ($38 - AR)
2.65 = 38 - AR
AR = 38 - 2.65
= $35.35