Question: Loretto Technologies Company's 2018 master budget called for using 60,000 hours of labor to produce 180,000 units of software. The standard labor rate for the

Loretto Technologies Company's 2018 master budget called for using 60,000 hours of labor to produce 180,000 units of software. The standard labor rate for the company's employees is $50 per direct labor hour. Demand exceeded expectations, resulting in production and sales of 210,000 software units. Actual direct labor costs were $3,475,000. The year-end variance report showed a total unfavorable labor variance of $475,000.
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Assume you are the vice president of manufacturing. Should you criticize or praise the production supervisor's performance? Explain.

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