Direct labor variances—solving for unknownsAckerman’s Garage uses standards to planand control labor time and expense. The standard time for an engine tune-up is 3 hours, and thestandard labor rate is $25 per hour. Last week, 42 tune- ups were completed. The laborefficiency variance was 14 hours unfavorable, and the labor rate variance totaled $140favorable.Required:a. Calculate the actual direct labor hourly rate paid for tune-up work last week.b. Calculate the dollar amount of the labor efficiency variance.c. What is the most likely explanation for these two variances? Is this a good trade-off for themanagement of the garage to make? Explain your answer.

Direct labor variances—solving for unknownsAckerman’s Garage uses standards to planand control labor time and expense. The standard time for an engine tune-up is 3 hours, and thestandard labor rate is $25 per hour. Last week, 42 tune- ups were completed. The laborefficiency variance was 14 hours unfavorable, and the labor rate variance totaled $140favorable.Required:a. Calculate the actual direct labor hourly rate paid for tune-up work last week.b. Calculate the dollar amount of the labor efficiency variance.c. What is the most likely explanation for these two variances? Is this a good trade-off for themanagement of the garage to make? Explain your answer.

Direct labor variances—solving for unknownsAckerman’s Garage uses standards to planand control labor time and expense. The standard time for an engine tune-up is 3 hours, and thestandard labor rate is $25 per hour. Last week, 42 tune- ups were completed. The laborefficiency variance was 14 hours unfavorable, and the labor rate variance totaled $140favorable.Required:a. Calculate the actual direct labor hourly rate paid for tune-up work last week.b. Calculate the dollar amount of the labor efficiency variance.c. What is the most likely explanation for these two variances? Is this a good trade-off for themanagement of the garage to make? Explain your answer.