Exercise 16-24 Name:
Insert your answers in the gray-shaded cells or select from drop-down list.
Enter formulas where appropriate. If an answer is incorrect, the word “wrong”
will appear.
a. Rate Variance
Actual payroll for month 38,950$
Actual hours worked 2,050
x Standard pay rate $20 (41,000)
Rate variance ($2,050) fav.
Efficiency Variance
Actual hrs. x Std. pay 41,000
( Actual monthly inspections 50,040
/ avg. inspections per hour) 24
x Standard pay rate $20 (41,700)
Efficiency variance ($700) fav.
Total Variance ($2,750) fav.
b. Compare Alternatives
Cost for full-time inspectors 36,000$
Cost for part-time inspectors 13,800
Total cost of proposed arrangement 49,800$
Total expected cost of existing arrangement 41,000
Disadvantage of full-time arrangement 8,800$
Solution