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• WTS recorded 120,700 tech calls last year. It had budgeted 126,400 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 $4,141,400 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 120,700 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 × 120,700 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 $81 12 $ 9,462,880 1,810,500 4,413,000 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. IT specialist Variable overhead Price Variance Efficiency Variance Total Variance

• WTS recorded 120,700 tech calls last year. It had budgeted 126,400 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 $4,141,400 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 120,700 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 × 120,700 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 $81 12 $ 9,462,880 1,810,500 4,413,000 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. IT specialist Variable overhead Price Variance Efficiency Variance Total Variance

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...
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• WTS recorded 120,700 tech calls last year. It had budgeted 126,400 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 $4,141,400 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 120,700 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 × 120,700 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 $81 12 $ 9,462,880 1,810,500 4,413,000 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. IT specialist Variable overhead Price Variance Efficiency Variance Total Variance
Transcribed Image Text:• WTS recorded 120,700 tech calls last year. It had budgeted 126,400 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 $4,141,400 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 120,700 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 × 120,700 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 $81 12 $ 9,462,880 1,810,500 4,413,000 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. IT specialist Variable overhead Price Variance Efficiency Variance Total Variance
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