The director of cost management for Odessa Company uses a statistical control chart to help management determine when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor efficiency variances during the first six months of the current year. January February $ 330 F 880 U March 780 U April 980 U May June 1,130 U 1,390 U The standard direct-labor cost during each of these months was $27,000. The controller has estimated that the firm's monthly direct- labor variances have a standard deviation of $1,030. Required: 2-a. Determine the cutoff value for investigation if the controller's rule of thumb is to investigate all variances equal to or greater than 5 percent of standard cost. 2-b. Based on the cutoff value, which month will have its direct-labor efficiency variance investigated? Complete this question by entering your answers in the tabs below. Req 2A Req 2B Determine the cutoff value for investigation if the controller's rule of thumb is to investigate all variances equal to or greater than 5 percent of standard cost. Cutoff value Req 2A Req 2B > Based on the cutoff value, which month will have its direct-labor efficiency variance investigated? The month would be investigated. < Req 2A Req 2B > Problem 10-33 Direct-Material and Direct-Labor Variances (LO 10-1, 10-3) New Jersey Valve Company manufactured 7,800 units during January of a control valve used by milk processors in its Camden plant. Records indicated the following: Direct labor Direct material purchased Direct material used 40,000 hr. at $14.10 per hr. 29,000 lb. at $2.10 per lb. 27,300 lb. The control valve has the following standard prime costs: Direct material 4 lb. at $2.00 per lb. $ 8.00 Direct labor 5 hr. at $14.50 per hr. Standard prime cost per unit 72.50 $80.50 Required: 1. Prepare a schedule of standard production costs for January, based on actual production of 7,800 units. 2. For the month of January, compute the following variances. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a schedule of standard production costs for January, based on actual production of 7,800 units. NEW JERSEY VALVE COMPANY: CAMDEN PLANT Schedule of Standard Production Costs Based on 7,800 Units For the Month of January Direct material Standard Costs Direct labor Total standard production costs < Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 For the month of January, compute the following variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).) a. Direct-material price variance b. Direct-material quantity variance c. Direct-material purchase price variance d. Direct-labor rate variance e. Direct-labor efficiency variance < Required 1 Required 2 >