Branca Inspections Inc specializes in determining whether a building or
Branca Inspections Inc. specializes in determining whether a building or house’s drainpipes are properly tied into the city’s sewer system. The company pours colored chemical through the pipes and collects an inspection sample from each outlet, which is then analyzed. Each job should take 15 hours for each of four inspectors, at a standard rate of $18 per hour. Each job requires a standard quantity of 5 gallons of Glow (a colored chemical), which should cost $25 per gallon. Data from the company’s most recent job (a building) follow:
5 men worked a total of 80 hours and were paid $17.50 per hour. . . . $1,400.00
5.5 gallons of Glow were used and cost $27.50 per gallon . . . . . . . . . 151.25
Total cost of the job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,551.25
Compute the following variances, using the formulas on pages 421–422 and 424:
Materials price and quantity variances.
Labor rate and efficiency variances.
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