Abby's Shades labor variances; Antics, Inc. cost allocations to the Crickeet engagement
Abby's Shades manufactures lamp shades. Abby Sanders, the owner, uses standard costs to calculate variances. Recently, a clerk mistakenly threw away some of the records, and Sanders has only partial data. For October, she knows that the direct labor flexible budget variance for the month was $1,385 unfavorable; the standard labor rate was $10 per hour and the actual labor rate was $10.50 per hour. Standard direct labor hours for October were 4,450 as compared to actual hours of 4,370 .
1. Compute the labor rate variance
2. Compute the labor quantity/efficiency Variance.
Allocating Indirect Costs and Computing Income:
Antics, Inc., is a technology consulting firm focused on Web site development and integration of Internet business applications. The president of the company expects to incur $719,600 of indirect costs this year, and she expects her firm to work 8,000 direct labor hours. Antics' system consultants earn $350 per hour. Clients are billed at 150% of direct labor cost. Last month Antics' consultants spent 100 hours on Crickett's engagement.
Requirement:
1. Compute Antics' indirect cost allocation rate per direct labor hour.
2. Compute the total cost assigned to the Crickett engagement.
3. Compute the operating income from the Crickett engagement.