After evaluating Pima Company’s manufacturing process, management decides to establish standards of 1.4 hours of direct labor per unit of product and $15 per hour for the labor rate. During October, the company uses 3,720 hours of direct labor at a $40,920 total cost to produce 4,000 units of product. In November, the company uses 4,560 hours of direct labor at a $54,720 total cost to produce 3,500 units of product.

(1) Compute the rate variance, the efficiency variance, and the total direct labor cost variance for each of these two months.

(2) Interpret the October direct labor variances.