The fire department expected to spend $$100,000$ in April. Actually, it spent $$108,680.$ The department thought it would pay each member of its team of firefighters $$25$ per hour. However, it paid them each $$26$ per hour on average. The department expected that the team of firefighters would work a total of $4,000$ hours and fight $100$ fires. Of course, many hours the firefighters are on duty in the station house between fires. Those hours are considered to be worked and the firefighters are

Variance Analysis Problem

TEMPLATE

Total Variance $=$ $$8,680($$$108,680-$ $$100,000)$

Original Budget: Budgeted Volume x Budgeted Quantity x Budgeted Rate

Flex Budget: Actual Volume x Budgeted Quantity x Budgeted Rate

x $$40$ x $$25=$ $$400$

$-$ x $$40$ x $$25=-$ $$25$

Volume Variance $=$ $$5,500$

Flex Budget: Actual Volume x Budgeted Quantity x Budgeted Rate

VQA Budget: Actual Volume x Actual Quantity x Budgeted Rate

$110$ x x $$25=$ $$180$

$-110$ x x $$25=-$ $$25$

Quantity Variance $=$ $$4,500$

VQA Budget: Actual Volume x Actual Quantity x Budgeted Rate

Actual: Actual Volume x Actual Quantity x Actual Rate

$110$ x $38$ x $=$ $$1$

$-$ $$110$ x $$38$ x $=-$ $$4,180$

Price Variance $=$ $$4,180$