Answer:
Instructions are listed below.
Explanation:
Giving the following information:
After evaluating Null Company’s manufacturing process, management decides to establish standards of 2 hours of direct labor per unit of product and $15.50 per hour for the labor rate. During October, the company uses 11,500 hours of direct labor at a $180,550 total cost to produce 6,100 units of product. In November, the company uses 22,500 hours of direct labor at a $355,500 total cost to produce 6,500 units of product.
October:
Direct labor efficiency variance= (SQ - AQ)*standard rate
Direct labor efficiency variance= (12,200 - 11,500)*15.50= 10,850 favorable
Direct labor price variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor price variance= (15.5 - 15.7)*11,500= 2,300 unfavorable
Total variation= 10,850 - 2,300= 8,550 favorable
November:
Direct labor efficiency variance= (SQ - AQ)*standard rate
Direct labor efficiency variance= (13,000 - 22,500)*15.5= 147,250 unfavorable
Direct labor price variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor price variance= (15.5 - 15.8)*22,500= 6,750
Total variation= 154,000 unfavorable
