Direct service labour price, efficiency, yield and mix variances.

(40 minutes) O’Connell & Associates, a firm of architects, has three levels of professional staff: principals (managers), who manage all aspects of the architectural job; senior architects, who are responsible for the main designs; and junior architects, who provide technical support. Budgeted costs for five architectural jobs done over a recent period are as follows: mki2

REQUIRED 1. Calculate the total direct labour price and efficiency variances for the five jobs.
2. Calculate the total direct labour mix and yield variances for the five jobs.
3. Comment on your results in requirements 1 and 2.
4. How might managers use information about the direct labour yield and mix variances?

Transcribed Image Text:

600 principal-hours at 16105 per hour 1,800 senior-hours at L75 per hour 3.600 junior-hours at L625 per hour I 63,000 135,000 90,000 Actual hours worked and the actual rates per hour to complete the five jobs are 295 principal-hours at L108 per hour 2,360 senior-hours at L670 per hour 3,245 junior-hours at 130 per hour LE 31,860 165,200 97,350