Exercise 21-16 Computing and interpreting labor variances LO P3 Javonte Co. set standards of 2 hours of direct labor per unit of product and $16.90 per hour for the labor rate. During October, the company uses 14,600 hours of direct labor at a $249,660 total cost to produce 7,500 units of product. In November, the company uses 18,600 hours of direct labor at a $318,990 total cost to produce 7,900 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 AH 14,600 Actual Cost X IAR x $ 17.10 $ 249,660 AH 14,600 X X $ 246,740 SR $ 16.90 Standard Cost SH X 15,000 X $ 253,500 SR $ 16.90 $ 2,920 $ 6,760 $ Direct labor rate variance Direct labor efficiency variance Total direct labor variance 2,920 Unfavorable 6,760 Favorable 3,840 Favorable $ November Actual Cost AH 1 x IAR 18,600 x $ 17.15 | $ 318,990 AH 18,600 X x $ 314,340 SR $ 16.90 Standard Cost SH X | 19,000 X $ 321,100 SR $ 16.90 $ 4,650 $ 6,760