Chapter 16, Problem 49E

Comprehensive Cost Variance Analysis

NSF Lube is a fast-growing chain of oil-change stores. The following data are available for last year’s services:

• NSF Lube performed 475,200 oil changes last year. It had budgeted 432,000 oil changes, averaging 10 minutes each.
• Standard variable labor and support costs per oil change were as follows:

• Fixed overhead costs:

• Fixed overhead is applied at the rate of $2.40 per oil change.
• Actual oil change costs:

Required

1. a.      Prepare a cost variance analysis for each variable cost for last year.
2. b.      Prepare a fixed overhead cost variance analysis like the one in Exhibit 16.13.