Confidential Insurance Company compares actual results with standard costs. The standard direct-labor rates are established each year when the annual plan is formulated and held constant for the entire year.

The standard direct-labor rates in effect for the current fiscal year and the standard hours allowed for the actual output of insurance claims for April in the claims department are shown in the following schedule:

Standard Standard Direct-Labor Direct-Labor Hours Rate per hour Allowed for Actual Output kabOnclassillllis-sea seaeenrn.t thes eee $8 500 LabOnelasst yeas Ree eascmnamsete eact es 7 500 EADOREClASS! | awe Fae Senna strani srsainsi 3) 500 The wage rates for each labor class increased under the terms of a new contract. The standard wage rates were not revised to reflect the new contract.

The actual direct-labor hours worked and the actual direct-labor rates per hour experienced for the month of April were as follows:

Actual Direct-Labor Actual Rate per Hour Direct-Labor Hours La@bOnClaSsilllin cuescn ee ns $8.20 550 LaDOnClaSS li ievamesectea eatters. searnee CAC 650 AbOr ClASSie wee teneta tet ree enente 5.20 S75 Required

a. Calculate the dollar amount of the total direct-labor variance for April for Confidential Insurance Company, and break the total variance into the following components:
(1) Direct-labor rate and efficiency variances.
(2) Direct-labor mix and yield variances.

b. Prepare a variance chart similar to the one in Exhibit 16-8.