Actual direct labor hours used (AH) 56,000 Actual direct labor rate per hour (AR) $ 15
Standard direct labor rate per hour (SR) $ 13
Standard direct labor hours for units produced (SH) 57,300
AH = Actual Hours
SH = Standard Hours
AR = Actual Rate
SR = Standard Rate
Compute the direct labor rate and efficiency variances for the period and classify each as favorable unfavorable or no variance.

Varto company has 9,400 units of its sole product in inventory that it produced last year at a cost of $23 each. this year’s model is superior to last year’s, and the 9,400 units cannot be sold at last year’s regular selling price of $42 each. varto has two alternatives for these items: (1) they can be sold to a wholesaler for $8 each, or (2) they can be reworked at a cost of $251,100 and then sold for $34 each. prepare an analysis to determine whether varto should sell the products as is or rework them and then sell them.