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Question(s) / Instruction(s):

After evaluating Pima Company’s manufacturing process, management decides to establish standards of 3.1 hours of direct labor per unit of product and $17 per hour for the labor rate. During October, the company uses 16,800 hours of direct labor at a $253,680 total cost to produce 5,500 units of product. In November, the company uses 24,800 hours of direct labor at a $379,440 total cost to produce 7,600 units of product.

Required:

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

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