Javon Company set standards of 3 hours of direct labor per unit at a rate of $16.00 per hour. During October, the com uses 19,200 hours of direct labor at a $311,040 total cost to produce 6,600 units. In November, the company uses 23,200 hours of direct labor at a $377,000 total cost to produce 7,000 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?
Javon Company set standards of 3 hours of direct labor per unit at a rate of $16.00 per hour. During October, the com uses 19,200 hours of direct labor at a $311,040 total cost to produce 6,600 units. In November, the company uses 23,200 hours of direct labor at a $377,000 total cost to produce 7,000 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Javon Company set standards of 3 hours of direct labor per unit at a rate of $16.00 per hour. During October, the company actually
uses 19,200 hours of direct labor at a $311,040 total cost to produce 6,600 units. In November, the company uses 23,200 hours of
direct labor at a $377,000 total cost to produce 7,000 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?
Transcribed Image Text:Actual Cost
Actual Cost
October
November
Standard Cost
Standard Cost
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