Javon Company set standards of 2 hours of direct labor per unit at a rate of $15.70

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Javon Company set standards of 2 hours of direct labor per unit at a rate of $15.70 per hour. During October, the company actually uses 12,000 hours of direct labor at a $190,800 total cost to produce 6,300 units. In November, the company uses 16,000 hours of direct labor at a $255,200 total cost to produce 6,700 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 variance for each of these two months.

(2) Javon investigates variances of more than 5% of actual direct labor cost. Which direct labor variances will the company investigate further?

Posted Date: May 18, 2024 02:03 PM

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Javon Company set standards of 2 hours of direct labor per unit at a rate of $15.70

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