ģ Exercise 8-16 (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 $15.30 per hour. During October, the company actually uses 11:300 hours of direct labor at a $172.050 total cost to produce 5,900 units. In November, the company uses 15,100 hours of direct laborat a $234,805 total cost to produce 6,300 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2
ģ Exercise 8-16 (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 $15.30 per hour. During October, the company actually uses 11:300 hours of direct labor at a $172.050 total cost to produce 5,900 units. In November, the company uses 15,100 hours of direct laborat a $234,805 total cost to produce 6,300 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Compute the direct labor rate variance, the direct labor efficiency variance, and the total direct labor variance for each of these two months.
Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.
Actual Cost
Actual Cost
0
o
$
$
0
0
$
$
0
0
0
0
October
November
$
S
0
0
Required 2 >
Standard Cost
Standard Cost
Transcribed Image Text:car
Exercise 8-16 (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 $15.30 per hour. During October, the company actually
uses 11.100 hours of direct labor at a $172,050 total cost to produce 5,900 units. In November, the company uses 15,100 hours of direct
labor at a $234,805 total cost to produce 6,300 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?
Complete this question by entering your answers in the tabs below.
Seved
Required 1
Required 2
Compute the direct labor rate variance, the direct labor efficiency variance, and the total direct labor variance for each of these two months.
Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance
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