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Exercise 2 3 - 1 6 Computing and interpreting labor variances LO P 3 Javonte Co . set standards of 3 hours of direct labor
Exercise Computing and interpreting labor variances LO P
Javonte Co set standards of hours of direct labor per unit of product and $ per hour for the labor rate. During October, the company uses hours of direct labor at a $ total cost to produce units of product. In November, the company uses hours of direct labor at a $ total cost to produce units of product.
AH Actual Hours
SH Standard Hours
AR Actual Rate
SR Standard Rate
Compute the direct labor rate variance, the direct labor efficiency variance, and the total direct labor cost variance for each of these two months. Classify each variance as favorable or unfavorable.
Javonte investigates variances of more than of actual direct labor cost. Which direct labor variances will the company investigate further?
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