NSF Lube performed 465,200 oil changes last year. It had budgeted 436,000 oil changes, averaging 12 minutes each.

Standard variable labor and support costs per oil change were as follows:

Direct oil specialist services: 12 minutes at $28 per hour $ 5.60

Variable support staff and overhead: 8.0 minutes at $18 per hour 2.4

Fixed overhead costs: Annual budget $1,040,000

Fixed overhead is applied at the rate of $4.40 per oil change.

Direct oil specialist services: 465,200 changes averaging 15 minutes at $30 per hour $ 3,489,000

Variable support staff and overhead: 0.16 labor-hours at $16 per hour 465,200 changes 1,190,912

Fixed overhead 1,500,000

a. Prepare a cost variance analysis for each variable cost for last year. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

	Price Variance	U/F	Efficinecy Variance	U/F	Total Variance	U/F
Oil Specialist
Variable Overhead

b. Prepare a fixed overhead cost variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect.)

	Text	Text
Price Variance
Production Volume Variance
FIxed Overhead Cost Variance