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:

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 105 per hour 1800 senior-hours at 75 per hour 3600 junior-hours at 25 per hour 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 108 per hour 2360 senior-hours at 70 per hour 3245 junior-hours at 30 per hour 31 860 165 200 97 350