Question:
(Appendix) Bernie Services has three labor classes: administrative assistants, para-legals, and attorneys. Standard wage rates are as follows: administrative assistants, $30per hour; paralegals, $60 per hour; and attorneys, $125 per hour. For October, the numbers of actual direct labor hours worked and of standard hours for probate cases were as follows:
|
Actual DLHs
|
Number of Standard Hours Allowed
|
|
Administrative assistant
|
900
|
1,008
|
|
Paralegal
|
2,520
|
2,772
|
|
Attorney
|
1,500
|
1,260
|
a. Calculate October's direct labor efficiency variance and decompose the total into the following components:
1. direct labor mix variance, and
2. direct labor yield variance.
b. Prepare a memo addressing whether management used an efficient mix of labor.