Rule: The two-way direct labor variances are computed as follows:

Choice "B" is correct. The difference between standard hours at standard wage rates and actual hours at standard rates is the labor usage/ efficiency varianceChoice "c" is incorrect. The direct labor rate variance is the difference between actual hours at standard rate and actual hours at actual rate.Choice "d" is incorrect. Spending variances are typically associated with three way overhead variances, not labor wage variances.Choice "a" is incorrect. Spending variances are typically associated with three way overhead variances, not labor wage variances.