Question 1.2.

According to (Snyder Dionisio, 2018: 72) variance analysis measures the amount of variance between a planned outcome (often a baseline) and actual performance.

Case Study - Meet the physical growth needs of Top Dog Project Services

You work for the Gauteng Falls location of Top Dog Project Services. You are remodeling an old downtown building as part of the Johannesburg City Center urban renewal program. Part of the building remodel is to install steel framing in the interior. You are tracking the cost and schedule performance for the steel frame.

You budgeted R200,000 for the frame. The work is now complete. You review your invoices for labour, and materials and you see that the frame actually cost R206 032, 00.

In looking at your invoices for the labour, you see that the rates were higher than estimated and the hours were greater than estimated. The estimated rates and hours and the actual rates and hours are below:

Estimated hourly rate = R28,00

Actual hourly rate = R30,25

Estimated hours = 960

Actual hours = 1,088

Question 1.2.

1.2.1. Calculate the impact of rate variance. (2)

1.2.2. Calculate the impact of the variance in the hours worked. (2)

1.2.3. Explain if there is cause for concern in terms of the variance once you have calculated each figure