Pueblo Service is a fast-growing chain of oil-change stores. The following data are available for last year’s services:

• Pueblo Service performed 396,000 oil changes last year. It had budgeted 360,000 oil changes, averaging 10 minutes each.

• Standard variable labor and support costs per oil change were as follows:

Direct oil specialist services: 10 minutes at $12 per hour . . . . . . . . . $2

Variable support staff and overhead: 7.5 minutes at $8 per hour. . . . 1

• Fixed overhead costs:

Annual budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $432,000

• Fixed overhead is applied at the rate of $1.20 per oil change.

• Actual oil change costs:

Direct oil specialist services: 396,000 changes averaging

12 minutes at $13.00 per hour. . . . . . . . . . . . . . . . . . . . . . . $1,029,600

Variable support staff and overhead: 0.14 labor-hours at

$7.50 per hour × 396,000 changes. . . . . . . . . . . . . . . . . . . . . . 415,800

Fixed overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000

Required

a. Prepare a cost variance analysis for each variable cost for last year.

b. Prepare a fixed overhead cost variance analysis like the one in Exhibit 16.13.