Exercise 21-16 (Algo) Computing and analyzing direct labor variances LO P3

Javon Company set standards of 2 hours of direct labor per unit at a rate of $16.30 per hour. During October, the company actually uses 13,200 hours of direct labor at a $217,800 total cost to produce 6,900 units. 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 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?

Compute the direct labor rate variance, the direct labor efficiency variance, and the total direct labor variance for each of these two months. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.)

October
Actual Cost			0				0	Standard Cost
		0
			$0	0			$0
				$0
				0
November
Actual Cost			0				0	Standard Cost
		0
			$0	0			$0
				$0
				0

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

Which direct labor variances will the company investigate further?