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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.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M950314

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