Exercise 16-24

Insert your answers in the gray-shaded cells or select from drop-down list.

Enter formulas where appropriate. If an answer is incorrect, the word “wrong” 

will appear.

a.

Rate Variance

Actual payroll for month

$     38,950

Actual hours worked

2,050

x Standard pay rate

$20

Rate variance

fav.

Efficiency Variance

Actual hrs. x Std. pay

        41,000

( Actual monthly inspections

50,040

  / avg. inspections per hour)

24

x Standard pay rate

$20

Efficiency variance

fav.

Total Variance

fav.

b.

Compare Alternatives

Cost for full-time inspectors

$     36,000

Cost for part-time inspectors

        13,800

Total cost of proposed arrangement

Total expected cost of existing arrangement

        41,000

Disadvantage

of full-time arrangement

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