Zinn Corporation recently agreed to a union contract provision that guarantees a minimum wage of $1,650 per month to each direct labour employee equivalent to 110 hours of work each month. Currently, 110 employees are covered by this provision. All direct labour employees are paid $15 per hour. Thus, until an employee works 110 hours, the remuneration is a fixed $1,650 per employee each month. Rusty Zinn, the assistant to the accountant was given the task of budgeting for the direct labour cost. Because of the contract provision, Rusty decided that the $181,500 (= 110 x $1,650 per month) should be treated as a fixed monthly cost. Rusty was instructed to calculate each month's budget using the following formula: $181,500+ $12 per direct labour-hour. Figures for the first three months of the fiscal year are as follows: April 29,000 $ 529,500 $ 435,000 $ 94,500 F Direct labour-hours planned and worked Direct labour costs budgeted Direct labour costs incurred Variance Required: 1. This part of the question is not part of your Connect assignment. May 45,000 $ 721,500 $ 675,000 $ 46,500 F These figures are a source of concern because they show unfavourable variances when production is high, and favourable variances during slow months. The factory manager is certain that this trend does not reflect reality. June 65,000 $ 961,500 $ 975,000 $ 13,500 U April May June 2. Develop a formula for direct labour costs more appropriate to the actual cost behaviour, then recalculate the variances for April, May, and June. Check my w

Zinn Corporation recently agreed to a union contract provision that guarantees a minimum wage of $1,650 per month to each direct labour employee equivalent to 110 hours of work each month. Currently. 110 employees are covered by this provision. All direct labour employees are poid $15 per hour. Thus, until an employee wotks 110 hours, the remuneration is a fixed $1,650 per employee each month. Rusty Zinn, the assistant to the accountant was given the task of budgeting for the direct labour cost. Because of the contract provision, Rusty decided that the $181500(110$1,650 per month) should be treated as a fixed monthly cost Rusty was instructed to calculate each month's budget using the following formula $181,500+$12 per direct labour hour: Figures for the first three months of the fiscal year are as follows: These figures are a source of concern because they show unfavourable variances when production is high, and favourable variances during slow months. The factory manager is certain that this trend does not refiect realty Required: 1. This part of the question is not part of your Connect ossignment 2. Develop a formula for direct labour costs more appropriate to the actual cost behaviour, then recalculote the variances for April, May, and June