Derek Wilson operates Clean Ride Enterprises, an auto detailing company with 20 employees. Jamal Jackson has...

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Derek Wilson operates Clean Ride Enterprises, an auto detailing company with 20 employees. Jamal Jackson has recently been hired by Wilson as a controller. Clean Ride's previous accountant had done very little in the area of variance analysis, but Wilson believes that the company could benefit from a greater understanding of his business processes. Because of the labour-intensive nature of the business, he decides to focus on calculating labour variances. Wilson examines past accounting records and establishes some standards for the price and quantity of labour. While Clean Ride's employees earn a range of hourly wages, they fall into two general categories: skilled labour, with an average wage of $20 per hour, and unskilled labour, with an average wage of $10 per hour. One standard 5-hour detailing job typically requires a combination of 3 skilled hours and 2 unskilled hours. Actual data from last month, when 600 detailing jobs were completed, are provided. (Click the icon to view the actual direct labour costs.) Required (Click on the icon for more information.) Requirement 1. What is the budgeted cost of direct labour for 600 detailing jobs? Select the formula and enter the amounts to calculate the budgeted cost of direct labour for 600 detailing jobs. More Information Budgeted cost per job X $ 80 X Total budgeted cost of Number of jobs = direct labour 600 $ 48,000 Requirement 2. How were the $1,151 favourable price variance and the $1,560 unfavourable labour efficiency variance calculated? What was the company's flexible- Begin by selecting the formula and enter the amounts to calculate the total direct labour price variance. Identify each variance as either favourable (F) or unfavourable all intermediate calculations to four decimal places, X.XXXX. Round your final answers to the nearest whole dollar.) = Price variance Looking over last month's data, Jackson determines that Clean Ride's labour price variance was $1,151 favourable, but the labour efficiency variance was $1,560 unfavourable. When Jackson presents his findings to Wilson, the latter is furious. "Do you mean to tell me that my employees wasted $1,560 worth of time last month? I've had enough. They had better shape up, or else!" Jackson tries to calm him down, saying that in this case the efficiency variance doesn't necessarily mean that employees were wasting time. Jackson tells him that he is going to perform a more detailed analysis and will get back to him with more information soon. t select a label. Round Skilled ( Unskilled ( Total )x )x )x Actual direct labour costs = = Skilled (2,006 hours) $ 39,117 9,292 Unskilled (944 hours) $ 48,409 Total actual direct labour cost Print Done Required Print Done 1. What is the budgeted cost of direct labour for 600 detailing jobs? 2. How were the $1,151 favourable price variance and the $1,560 unfavourable labour efficiency variance calculated? What was the company's flexible-budget variance? 3. What do you think Jackson meant when he said that "in this case, the efficiency variance doesn't necessarily mean that employees were wasting time"? 4. For the 600 detailing jobs performed last month, what is the actual direct labour input mix percentage? What was the standard mix for labour? 5. Calculate the total direct labour mix and yield variances. 6. How could these variances be interpreted? Did the employees waste time? Upon further investigation, you discover that there were some unfilled vacancies last month in the unskilled labour positions that have recently been filled. How will this new information likely impact the variances going forward? Print Done - Derek Wilson operates Clean Ride Enterprises, an auto detailing company with 20 employees. Jamal Jackson has recently been hired by Wilson as a controller. Clean Ride's previous accountant had done very little in the area of variance analysis, but Wilson believes that the company could benefit from a greater understanding of his business processes. Because of the labour-intensive nature of the business, he decides to focus on calculating labour variances. Wilson examines past accounting records and establishes some standards for the price and quantity of labour. While Clean Ride's employees earn a range of hourly wages, they fall into two general categories: skilled labour, with an average wage of $20 per hour, and unskilled labour, with an average wage of $10 per hour. One standard 5-hour detailing job typically requires a combination of 3 skilled hours and 2 unskilled hours. Actual data from last month, when 600 detailing jobs were completed, are provided. (Click the icon to view the actual direct labour costs.) Required (Click on the icon for more information.) Requirement 1. What is the budgeted cost of direct labour for 600 detailing jobs? Select the formula and enter the amounts to calculate the budgeted cost of direct labour for 600 detailing jobs. More Information Budgeted cost per job X $ 80 X Total budgeted cost of Number of jobs = direct labour 600 $ 48,000 Requirement 2. How were the $1,151 favourable price variance and the $1,560 unfavourable labour efficiency variance calculated? What was the company's flexible- Begin by selecting the formula and enter the amounts to calculate the total direct labour price variance. Identify each variance as either favourable (F) or unfavourable all intermediate calculations to four decimal places, X.XXXX. Round your final answers to the nearest whole dollar.) = Price variance Looking over last month's data, Jackson determines that Clean Ride's labour price variance was $1,151 favourable, but the labour efficiency variance was $1,560 unfavourable. When Jackson presents his findings to Wilson, the latter is furious. "Do you mean to tell me that my employees wasted $1,560 worth of time last month? I've had enough. They had better shape up, or else!" Jackson tries to calm him down, saying that in this case the efficiency variance doesn't necessarily mean that employees were wasting time. Jackson tells him that he is going to perform a more detailed analysis and will get back to him with more information soon. t select a label. Round Skilled ( Unskilled ( Total )x )x )x Actual direct labour costs = = Skilled (2,006 hours) $ 39,117 9,292 Unskilled (944 hours) $ 48,409 Total actual direct labour cost Print Done Required Print Done 1. What is the budgeted cost of direct labour for 600 detailing jobs? 2. How were the $1,151 favourable price variance and the $1,560 unfavourable labour efficiency variance calculated? What was the company's flexible-budget variance? 3. What do you think Jackson meant when he said that "in this case, the efficiency variance doesn't necessarily mean that employees were wasting time"? 4. For the 600 detailing jobs performed last month, what is the actual direct labour input mix percentage? What was the standard mix for labour? 5. Calculate the total direct labour mix and yield variances. 6. How could these variances be interpreted? Did the employees waste time? Upon further investigation, you discover that there were some unfilled vacancies last month in the unskilled labour positions that have recently been filled. How will this new information likely impact the variances going forward? Print Done -

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Requirement 1 What is the budgeted cost of direct labour for 600 detailing jobs Budgeted cost per job 3 skilled hours 20 per hour 2 unskilled hours 10 ... View the full answer