pueblo service is a fast growing chain of oil change stores the 371723

Pueblo Service is a fast growing chain of oil change stores. The following data are available for last year’s services:

?c Pueblo Service performed 396,000 oil changes last year. It had budgeted 360,000 oil changes, averaging 10 minutes each.

?c Standard variable labor and support costs per oil change were as follows:

Direct oil specialist services: 10 minutes at $12 per hour . . . . . . . . . $2

Variable support staff and overhead: 7.5 minutes at $8 per hour. . . . 1

?c Fixed overhead costs:

Annual budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $432,000

?c Fixed overhead is applied at the rate of $1.20 per oil change.

?c Actual oil change costs:

Direct oil specialist services: 396,000 changes averaging

12 minutes at $13.00 per hour. . . . . . . . . . . . . . . . . . . . . . . $1,029,600

Variable support staff and overhead: 0.14 labor hours at

$7.50 per hour A? 396,000 changes. . . . . . . . . . . . . . . . . . . . . . 415,800

Fixed overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000

Required

a. Prepare a cost variance analysis for each variable cost for last year.

b. Prepare a fixed overhead cost variance analysis like the one in Exhibit 16.13.