Secaur Tax Services prepares tax returns for senior citizens. The standard in terms of (direct labor) time spent on each return is 2 hours. The direct labor standard wage rate at Secaur is $16.00 per hour. Last month, 1,590 direct labor hours were used to prepare 800 tax returns. Total wages totaled $26,235.
Requirements
1. What is the actual (direct labor) wage rate per hour paid last month?
2. What is the direct labor rate variance?
3. What is the direct labor efficiency variance?
4. How might the direct labor rate variance for Secaur last month be causing the direct labor efficiency variance?