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 120,600 tech calls last year. It had budgeted 126,200 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 $4,141,200 Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 120,600 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 120,600 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. $81 12 $ 9,455,040 1,809,000 4,408,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 120,600 tech calls last year. It had budgeted 126,200 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 $4,141,200
Fixed overhead is applied at the rate of $36.00 per call.
Actual tech service call costs:
Direct IT specialist services: 120,600 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 120,600 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
Fixed overhead price variance
Fixed overhead production volume variance
Total fixed overhead variance
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.
< Required A
U
F
U
$81
12
Required B >
$ 9,455,040
1,809,000
4,408,000
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 120,600 tech calls last year. It had budgeted 126,200 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 $4,141,200 Fixed overhead is applied at the rate of $36.00 per call. Actual tech service call costs: Direct IT specialist services: 120,600 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 120,600 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 Fixed overhead price variance Fixed overhead production volume variance Total fixed overhead variance 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. < Required A U F U $81 12 Required B > $ 9,455,040 1,809,000 4,408,000
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