Engineered cost variances Fred's Freight employs three drivers who are paid $20 per hour for regular time and $30 for overtime. A single pickup and delivery requires, on average, one hour of driver time. Drivers are paid for a 40-hour week because they must be on call all day. One driver stands by for after-hour deliveries. Analyze the labor cost variances for one week in which the company made 105 daytime deliveries and 12 after-hour deliveries. The payroll for drivers for that week was $2,780. The employees worked 120 hours of regular time and 15 hours of overtime. Note: Do not use a negative sign with your answers. Total labor variance: $ 320 ✓ Unfavorable Labor rate variance: $ (70) x Labor efficiency variance: $ 390 Favorable Unfavorable

Engineered cost variances Fred's Freight employs three drivers who are paid $20 per hour for regular time and $30 for overtime. A single pickup and delivery requires, on average, one hour of driver time. Drivers are paid for a 40-hour week because they must be on call all day. One driver stands by for after-hour deliveries. Analyze the labor cost variances for one week in which the company made 105 daytime deliveries and 12 after-hour deliveries. The payroll for drivers for that week was $2,780. The employees worked 120 hours of regular time and 15 hours of overtime. Note: Do not use a negative sign with your answers. Total labor variance: $ 320 ✓ Unfavorable Labor rate variance: $ (70) x Labor efficiency variance: $ 390 Favorable Unfavorable

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Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter22: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 3ADM: Direct labor time variance Maywood City Police uses variance analysis to monitor police staffing....

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Direct labor time variance Maywood City Police uses variance analysis to monitor police staffing. The following table identifies three common police activities, the standard time to perform each activity, and their actual frequency to establish the expected cost to serve these activities. The police are paid 25 per hour. The actual amount of hours per activity for the year were as follows: A. Determine the total budgeted cost to perform the three police activities. B. Determine the total actual cost to perform the three police activities. C. Determine the direct labor time variance. D. What does the time variance suggest?
Direct labor time variance Maywood City Police uses variance analysis to monitor police staffing. The following table identifies three common police activities, the standard time to perform each activity, and their actual frequency to establish the expected cost to serve these activities. Police Activity Standard Hours per Activity Actual Activities for Year Total Employee Hours Theft 0.60 7,000 4,200 Arrest 1.50 18,000 27,000 Patrol activities 0.30 9,000 2,700 33,900 The police are paid 25 per hour. The actual amount of hours per activity for the year were as follows: Police Activity Actual Hours per Activity Theft 0.75 Arrest 2.00 Patrol activities 0.40 A. Determine the total budgeted cost to perform the three police activities. B. Determine the total actual cost to perform the three police activities. C. Determine the direct labor time variance. D. What does the time variance suggest?