Rate variance-efficiency variance


After evaluating Zero Company's manufacturing process, management decides to establish standards of 3.7 hours of direct labor per unit of product and $12 per hour for the labor rate. During October, the company uses 18,600 hours of direct labor at a $227,850 total cost to produce 4,500 units of product. In November, the company uses 28,800 hours of direct labor at a $384,768 total cost to produce 6,600 units of product.

Compute the rate variance, the efficiency variance, and the total direct labor cost variance for each of these two months.

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Accounting Basics: Rate variance-efficiency variance
Reference No:- TGS050314

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