Solution-Determine the rate variance time variance and

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The following data relate to labor cost for production of 12,500 cellular telephones:

Actual: 13,600 hours at $16.15 $219,640
Standard: 13,725 hours at $16.00 $219,600

a. Determine the rate variance, time variance, and total direct labor variance.

b. Discuss what might have caused these variances.

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