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Problem - Direct labor variances - The New Day Clothes Company produced 18,000 units during June of the current year. The Cutting Department used 3,500 direct labor hours at an actual rate of $11.80 per hour. The Sewing Department used 5,800 direct labor hours at an actual rate of $12.15 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $12.00. The standard labor time for the Cutting and Sewing departments is 0.19 hour and 0.33 hour per unit, respectively.
Required -
a. Determine the direct labor rate and time variances for the (1) Cutting Department (2) Sewing Department.
b. Interpret your results.
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