Javonte Co. set standards of 2 hours of direct labor per unit of product and $16.70 per hour for the labor rate. During October, the company uses 14,000 hours of direct labor at a $236,600 total cost to produce 7,300 units of product. In November, the company uses 18,000 hours of direct labor at a $305,100 total cost to produce 7,700 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? ompute 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. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

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. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

October
Actual Cost			0				0	Standard Cost
AH	x
236	x	$0.00
			$0	0			$0
				$0
				0
November
Actual Cost			0				0	Standard Cost
		0
			$0	0			$0
				$0
				0