Exercise 21-16 Computing and interpreting labor variances LO P3

Javonte Co. set standards of 2 hours of direct labor per unit of product and $16.30 per hour for the labor rate. During October, the company uses 13,200 hours of direct labor at a $217,800 total cost to produce 6,900 units of product. In November, the company uses 17,200 hours of direct labor at a $284,660 total cost to produce 7,300 units of product. AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate (1) 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. (2) Javonte investigates variances of more than 5% of actual direct labor cost. Which direct labor variances will the company investigate further?

Javonte investigates variances of more than 5% of actual direct labor cost. Which direct labor variances will the a investigate further? Which direct labor variances will the company investigate further? Actual Cost Standard Cost November Actual Cost Standard Cost