Question: Computing an indirect labor variance and expected costs at different levels of activity. The monthly fixed cost element of indirect labor in the Grinding Department

Computing an indirect labor variance and expected costs at different levels of activity. The monthly fixed cost element of indirect labor in the Grinding Department of the Jefferson Gear Company is $6,000 and the variable cost element is $1.10 per direct labor hour. During March 19X2, production was 4,200 direct labor hours. Indirect labor costs were $10,300.

a. Compute the amount of budget variance for indirect labor for the month.

b. What would be the expected indirect labor cost at (1) 3,600 direct labor hours and at (2) 7,180 direct labor hours?

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