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.
Required
Assume you are the vice president of manufacturing. Should you criticize or praise the production supervisor's performance? Explain.