Computation and interpretation of labor variances


After evaluating Zero Company's manufacturing process, management decided 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 used 3,780 hours of direct labor at $45,360 total cost to produce 2,700 unit of product. In November, the company used 4,480 hours of direct labor at a $47,040 total cost to produce 2,800 units of product.

1. Compute the labor rate variance, the labor efficiency variance, and the total direct labor cost variance for October and for November.

2. Interpret the October direct labor variances.

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Computation and interpretation of labor variances
Reference No:- TGS057256

Expected delivery within 24 Hours