Pease Contractors is a local home remodeling company. In analyzing financial performance, the accountant compares actual results with a flexible budget. The standard direct labor rates used in the flexible budget are established each year at the time the annual plan is formulated and held constant for the entire year.

The standard direct labor rates in effect for the current fiscal year and the standard hours allowed for the actual output of work for August are shown in the following schedule.

The actual direct labor-hours worked and the actual direct labor rates per hour experienced for the month of August were as follows. 

Required

Calculate the dollar amount of the total direct labor variance for August for Pease Contractors. Break down the total variance into the following components:

a. Direct labor price and efficiency variances.

b. Direct labor mix and yield variances. 

Transcribed Image Text:

Worker Classification Supervisor Skilled. General. Standard Direct Labor Rate per Hour $50 30 20 Standard Direct Labor-Hours Allowed for Output 1,800 2,250 4,950