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Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year's services: • WTS recorded 121,300 tech calls last year. It had budgeted 127,600 calls, averaging 90 minutes each. • Standard variable labor and support costs per tech call were as follows: Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour • Fixed overhead costs: Annual budget $4,142,600 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: $81 12

Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year's services: • WTS recorded 121,300 tech calls last year. It had budgeted 127,600 calls, averaging 90 minutes each. • Standard variable labor and support costs per tech call were as follows: Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour • Fixed overhead costs: Annual budget $4,142,600 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: $81 12

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required A Required B Prepare a fixed overhead cost variance analysis. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Fixed overhead price variance Fixed overhead production volume variance Total fixed overhead variance
Transcribed Image Text:Required A Required B Prepare a fixed overhead cost variance analysis. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Fixed overhead price variance Fixed overhead production volume variance Total fixed overhead variance
Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year's services: • WTS recorded 121,300 tech calls last year. It had budgeted 127,600 calls, averaging 90 minutes each. • Standard variable labor and support costs per tech call were as follows: Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour • Fixed overhead costs: Annual budget $4,142,600 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 121,300 calls averaging 84 minutes at $56.00 per hour Variable support staff, supplies, and overhead: averaging 40 minutes per call at $22.50 per hour x 121,300 calls Fixed overhead Required: a. Prepare a cost variance analysis for each variable cost for last year. b. Prepare a fixed overhead cost variance analysis. Complete this question by entering your answers in the tabs below. Required A Required B IT specialist Variable overhead $81 12 Prepare a cost variance analysis for each variable cost for last year. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Efficiency Variance Total Variance Price Variance $ 9,509,920 1,819,500 4,443,000
Transcribed Image Text:Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year's services: • WTS recorded 121,300 tech calls last year. It had budgeted 127,600 calls, averaging 90 minutes each. • Standard variable labor and support costs per tech call were as follows: Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour • Fixed overhead costs: Annual budget $4,142,600 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 121,300 calls averaging 84 minutes at $56.00 per hour Variable support staff, supplies, and overhead: averaging 40 minutes per call at $22.50 per hour x 121,300 calls Fixed overhead Required: a. Prepare a cost variance analysis for each variable cost for last year. b. Prepare a fixed overhead cost variance analysis. Complete this question by entering your answers in the tabs below. Required A Required B IT specialist Variable overhead $81 12 Prepare a cost variance analysis for each variable cost for last year. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Efficiency Variance Total Variance Price Variance $ 9,509,920 1,819,500 4,443,000
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