After evaluating Null Company’s manufacturing process, management decides to establish standards of 2 hours of direct labor per unit of product and $16.30 per hour for the labor rate. During October, the company uses 13,200 hours of direct labor at a $217,800 total cost to produce 6,900 units of product. In November, the company uses 23,300 hours of direct labor at a $386,780 total cost to produce 7,300 units of product.

Compute the rate variance, the efficiency variance, and the total direct labor cost variance for each of these two months. Round your “AR” and “SR” answers to 2 decimal places.

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Posted on May 27, 2016Author TutorCategories Question, Questions