Engineered cost variances) Management at Datong Industries has estimated that each quality control inspector should be able to make an average of 12 inspections per hour. Retired factoiy supervisors are excellent quality control inspectors because of their familiarity with the products and processes in the plant. Datong management has decided to staff the quality control program with these individuals and has set $18 as the standard hourly rate. During the first month of the new program, 12,560 inspections were made, and the total pay to the inspectors was $20,928 for 1,030 hours of work.

a. Perform a variance analysis for management on the quality control labor cost.

b. Assume that management could hire four full-time inspectors for a monthly salary of $5,000 each and hire part-timers for the overflow.

Each full-time inspector would work 170 hours per month. How would the total cost of this alternative compare to the cost of a 1,030-hour month at the standard rate of $18 per hour?

 LO.1