Question: The fire department expected to spend 100 000 in April

The fire department expected to spend $ 100,000 in April. Actually, it spent $ 108,680. The department thought it would pay each member of its team of fire-fighters $ 25 per hour. However, it paid them each $ 26 per hour on average. The department expected that the team of firefighters would work a total of 4,000 hours and fight 100 fires. Of course, many hours the firefighters are on duty in the station house between fires. Those hours are considered to be worked and the firefighters are paid for those hours. The actual results were 4,180 hours worked by the team of fire-fighters and 110 fires fought by the department. What was the total variance? What were the rate (or price), quantity, and volume variances? Which variances were favorable and which were unfavorable?

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  • CreatedDecember 19, 2014
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