A. Alberto Gonzalez operates a commercial painting business in Tampa, which has a very tight labor market. Much of his work focuses on newly constructed apartments and townhouses. The following data relate to crew no. 5 for a recently concluded period when 85 apartment units were painted: Three new employees were assigned to crew no. 5. Wages averaged $18.80 per hour for each employee; the crew took 2,550 hours to complete the work. Based on his knowledge of the operation, articles in trade journals, and conversations with other painters, Gonzalez established the following standards: Typical hourly wage rate of crew personnel: $15 Anticipated crew time for each unit: 34 hours The paint quantity variance was $6,070F. The operation did not go as smoothly as planned, with customer complaints and problems being much higher than expected.

Required:

a. Compute Gonzalezs direct-labor variances.

b. Is the direct-labor rate variance consistent with what you might expect in a tight labor market? Explain.

c. Analyze the information given and that you calculated, and determine what likely happened that would give rise to customer complaints.