Question

Direct Labor Time Variance

Maywood City Police uses variance analysis to monitor police staffing. The following table identifies three common police activities, the standard time to perform each activity, and their actual frequency to establish the expected cost to serve these activities.

Police Activity		Standard Hours per Activity		Actual Activities for Year		Total Employee Hours
Theft		0.60		7,000		4,200
Arrest		1.50		18,000		27,000
Patrol activities		0.30		9,000		2,700
						33,900

The police are paid $25 per hour.

The actual amount of hours per activity for the year were as follows:

Police Activity		Actual Hours per Activity
Theft		0.75
Arrest		2.00
Patrol activities		0.40

a. Determine the total budgeted cost to perform the three police activities.
Total budgeted cost $

b. Determine the total actual cost to perform the three police activities.
Total actual cost $

c. Determine the direct labor time variance.
$

Answer 1

Answer (a):

Total budgeted cost to perform the three police activities = $847,500

Workings:

Answer (b):

Total actual cost to perform the three police activities = $1,121,250

Workings:

Answer (c):

Direct labor time variance = $273,750 Unfavorable

Workings: