Question: CodeHead Software Inc. does software development. One important activity in software development is writing software code. The manager of the WordPro Development Team determined that
CodeHead Software Inc. does software development. One important activity in software development is writing software code. The manager of the WordPro Development Team determined that the average software programmer could write lines of code in an hour. The plan for the first week in May called for lines of code to be written on the WordPro product. The WordPro Team has five programmers. Each programmer is hired from an employment firm that requires temporary employees to be hired for a minimum of a hour week. Programmers are paid $ per hour. The manager offered a bonus if the team could generate more lines for the week, without overtime. Due to a project emergency, the programmers wrote more code in the first week of May than planned. The actual amount of code written in the first week of May was lines, without overtime. As a result, the bonus caused the average programmer's hourly rate to increase to $ per hour during the first week in May.
Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an amount is zero, enter and choose "Not applicable" from the dropdown.
Required:
If the team generated lines of code according to the original plan, what would have been the labor time variance?
$
What was the actual labor time variance as a result of generating lines of code?
$ d
What was the labor rate variance as a result of the bonus?
$
The manager is trying to determine if a better decision would have been to hire a temporary programmer to meet the higher programming demand in the first week of May, rather than paying out the bonus. If another employee was hired from the employment firm, what would have been the labor time variance in the first week?
Which decision is better, paying the bonus or hiring another programmer?
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