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\fLooking over last month's data, Renton determines that Clean Ride's labour price variance was $8,272 favourable, but the labour efficiency variance was $2,450 unfavourable. When Renton presents his findings to Fallon, the latter is furious. "Do you mean to tell me that my employees wasted $2,450 worth of time last month? I've had enough. They had better shape up, or else!" Renton tries to calm him down, saying that in this case the efficiency variance doesn't necessarily mean that employees were wasting time. Renton tells him that he is going to perform a more detailed analysis and will get back to him with more information soon.1. What is the budgeted cost of direct labour for 610 detailing jobs? 2. How were the $8,272 favourable price variance and the $2,450 unfavourable labour efficiency variance calculated? What was the company's flexible-budget variance? 3. What do you think Fallon meant when said that "in this case the efficiency variance doesn't necessarily mean that employees were wasting time"? 4. For the 610 detailing jobs performed last month, what is the actual direct labour input mix percentage? What was the standard mix for labour? 5. Calculate the total direct manufacturing labour mix and yield variances. 6. How could these variances be interpreted? Did the employees waste time? Upon further investigation, you discover that there were some unfilled vacancies last month in the unskilled labour positions that have recently been filled. How will this new information likely impact the variances going forward?Samuel Fallon operates Clean Ride Enterprises, an auto detailing company with 20 employees. John Renton has recently been hired by Fallon as a controller. Clean Ride's previous accountant had done very little in the area of variance analysis, but Fallon believes that the company could benefit from a greater understanding of his business processes. Because of the labour-intensive nature of the business, he decides to focus on calculating labour variances. Fallon examines past accounting records and establishes some standards for the price and quantity of labour. While Clean Ride's employees earn a range of hourly wages, they fall into two general categories: skilled labour, with an average wage of $21 per hour, and unskilled labour, with an average wage of $7 per hour. One standard 9-hour detailing job typically requires a combination of 6 skilled hours and 3 unskilled hours. Actual data from last month, when 610 detailing jobs were completed, are provided. (Click the icon to view the actual direct labour costs.) i (Click on the icon for more information.) Required Requirement 1. What is the budgeted cost of direct labour for 610 detailing jobs? Select the formula and enter the amounts to calculate the budgeted cost of direct labour for 610 detailing jobs. Total budgeted cost of direct labour Requirement 2. How were the $8,272 favourable price variance and the $2,450 unfavourable labour efficiency variance calculated? What was the company's flexible-budget variance? Begin by selecting the formula and enter the amounts to calculate the total direct labour price variance. Identify each variance as either favourable (F) or unfavourable (U). (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Round all intermediate calculations to four decimal places, X.XXXX. Round your final answers to the nearest whole dollar.) = Price variance Skilled ( )x Unskilled ( TotalNow select the formula and enter the amounts to calculate the total direct labour efficiency variance. Identify each variance as either favourable (F) or unfavourable (U). (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Round your final answers to the nearest whole dollar.) Efficiency variance Skilled ( Unskilled ( Total Requirement 3. What do you think Fallon meant when said that "in this case the efficiency variance doesn't necessarily mean that employees were wasting time"? In a company where there is a mixture of workers, some at higher wages and others at lower, all working on the same projects, a(n) favourable efficiency variance can be the result of which employees worked on the project, not just how many hours were spent. If higher paid workers worked more than their standard percentage of the time, a(n) unfavourable efficiency variance will result. Requirement 4. For the 610 detailing jobs performed last month, what is the actual direct labour input mix percentage? What was the standard mix for labour? (Round the percentage amounts to the nearest tenth, X.X%)Actual quantity of Budgeted quantity of Budgeted input Actual mix input for actual output mix Skilled % Unskilled Total Requirement 5. Calculate the total direct manufacturing labour mix and yield variances. Begin by selecting the formula and entering the amounts to calculate the total direct labour mix variance. Identify each variance as either favourable (F) or unfavourable (U). (Enter any percentages in decimal format to three decimal places, X.XXX. Round your final answers to the nearest whole dollar.) = Mix variance Skilled ( Unskilled ( ) X Total Next select the formula and enter the amounts to calculate the total direct labour yield variance. Identify each variance as either favourable (F) or unfavourable (U). (Enter any percentages in decimal format to three decimal places, XXXX. Round your final answers to the nearest whole dollar.)Yield variance Skilled ( ) x Unskilled ( Total Requirement 6. How could these variances be interpreted? Did the employees waste time? Upon further investigation, you discover that there were some unfilled vacancies last month in the unskilled labour positions that have recently been filled. How will this new information likely impact the variances going forward? While the efficiency variance was , it was due to the V. The mix variance is the result of a than standard percentage of skilled labour used. The yield variance, which is a accurate measure of hours used, is because total hours were actually than the standard for the detail jobs. The skilled workers probably worked more than the unskilled. In light of the information regarding the vacancies, last month could be treated as (especially in terms of the mix of labour employed), and more variances will likely follow in future months. While it is recommended that variances be calculated action by Fallon with the employees appears necessary