Compute the direct labor rate and efficiency variances.

To compute the direct labor rate and efficiency variances, you need to have the following information:

1. Standard labor hours per unit of output
2. Actual labor hours used
3. Standard labor rate per hour
4. Actual labor rate per hour

Here are the steps to calculate the variances:

Direct Labor Rate Variance:

1. Subtract the standard labor rate per hour from the actual labor rate per hour. This will give you the rate variance per hour.
2. Multiply the rate variance per hour by the actual number of hours worked. This will give you the total labor rate variance.

Formula: Labor Rate Variance = (Actual Labor Rate per Hour - Standard Labor Rate per Hour) x Actual Hours Worked

Direct Labor Efficiency Variance:

1. Subtract the actual labor hours used from the standard labor hours per unit of output. This will give you the efficiency variance per unit.
2. Multiply the efficiency variance per unit by the standard labor rate per hour. This will give you the total labor efficiency variance.

Formula: Labor Efficiency Variance = (Actual Hours Worked - Standard Hours) x Standard Labor Rate per Hour

Remember, a positive variance indicates that you spent more than expected (unfavorable variance), while a negative variance indicates that you spent less than expected (favorable variance).