Question 3 (25 marks) Fenshaw Grove Electrical Services Inc. provides electricians to large commercial construction job sites within the North Vancouver Island region. The following table shows budgeted and actual results for Fenshaw Grove for the month of May. The budgeted total cost per hour of billed services is $69/hour based on the information below. Fenshaw Grove charges their customers $103.50 per hour of billed services (1.5 times their total cost per hour of billed services). The budgeted monthly Rent and Utilities cost reflects the budgeted annual cost divided by 12. However, utilities costs vary significantly throughout the year and are highest in the colder months of November through March Because the company knows well in advance the number of construction jobs they have successfully bid on, the actual number of jobs and the budgeted number of jobs for the month of May is 26 jobs. Fenshaw Grove had to let one of their apprentice electricians go because they were stealing supplies from the company. They filled the position with an experienced electrician Budgeted travel costs are based on the anticipated location of the job sites where Fenshaw Grove will be providing services. Electricians' Hours Billed Electrician's Average hourly wage rate Administrative Salaries Equipment and Supplies Costs Rent and Utilities Travel Costs to job sites Budgeted Amounts Actual Results 650 hours 590 hours $45 $46.50 $4,500 $4,500 $6.500 $6,450 $3.350 $3,780 $1,250 $ 905 Required: a) How does actual total cost per hour of billed services compare with the budgeted total cost per hour of billed services? b) Calculate the rate and the efficiency variances for the wages and the total variances for the other costs and indicate it each variance is favourable or unfavourable. c) Provide a potential cause for each variance. d) What are the most significant causes of the difference in the total cost per hour of billed services between budgeted and actual total cost per hour of biled services? Are these costs controllable by the company? e) How does variance analysis help the owner of Fenshaw Grove improve their business? f) if the industry average charge to customers is $105 per hour of billed services should Fenshaw Grove pass their additional cost per hour of billed services on to their customers on future job bids? Explain your