(Appendix) Bernie Services has three labor classes: administrative assistants, para legals, and attorneys. Standard wage rates are as follows: administrative assistants, $30per hour; paralegals, $60 per hour; and attorneys, $125 per hour. For October, the numbers of actual direct labor hours worked and of standard hours for probate cases were as follows:
|
Actual DLHs |
Number of Standard Hours Allowed |
|
|
Administrative assistant |
900 |
1,008 |
|
Paralegal |
2,520 |
2,772 |
|
Attorney |
1,500 |
1,260 |
a. Calculate October’s direct labor efficiency variance and decompose the total into the following components:
1. direct labor mix variance, and
2. direct labor yield variance.
b. Prepare a memo addressing whether management used an efficient mix of labor.