Background The direct labour standards for the production of Product G are Standard wage rate 15 per hour Standard output 2 unit per hour Direct labour hours are used to absorb production overheads. In period 1 the following direct labour variances were reported Rate $760 Adv Efficiency $950 Fav In period 2, budgeted production of Product G was 5,600 units and actual production was 5,800 units. Actual direct labour hours in the period were 2,520 at a total direct labour cost of $33,100.