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 121,500 tech calls last year. It had budgeted 128,000 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 $4,143,000 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 121,500 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 121,500 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. $81 12 $ 9,525,600 1,822,500 4,453,000
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 121,500 tech calls last year. It had budgeted 128,000 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 $4,143,000 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 121,500 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 121,500 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. $81 12 $ 9,525,600 1,822,500 4,453,000
Chapter1: Financial Statements And Business Decisions
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