Qurestion: After evaluating Zero Company's manufacturing process, management decides to establish standards of 1.5 hours of direct labor per unit of product and $11 per hour for the labor rate. During October, the company uses 3,780 hours of direct labor at a $45,360 total cost to produce 2,700 units of product. In November, the company uses 4,480 hours of direct labor at a $47,040 total cost to produce 2,800 units of product.
(1) Compute the rate variance, the efficiency variance, and the total direct labor cost variance for each of these two months.
(2) Interpret the October direct labor variances.