Question
Theta Automotive Scenario: Variance Analysis Data: Theta Automotive budgeted $120,000 for direct labor costs based on 12,000 hours at $10 per hour. Actual direct labor
- Theta Automotive
Scenario: Variance Analysis
Data: Theta Automotive budgeted $120,000 for direct labor costs based on 12,000 hours at $10 per hour. Actual direct labor costs amounted to $130,000 for 13,000 hours worked.
Requirements:
- Calculate the direct labor rate variance and efficiency variance.
- Determine whether the variances are favorable or unfavorable.
- Discuss the causes of direct labor variances at Theta Automotive.
- Analyze the impact of direct labor variances on Theta Automotive's profitability.
- Evaluate Theta Automotive's budgeting and cost control processes.
- Recommend improvements to Theta Automotive's variance analysis.
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Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline Reck, Suzanne Lowensohn, Earl Wilson
17th edition
78025826, 978-1259564239, 1259564231, 978-0078025822
