Description of direct labor variancesrichie ventura

Reference no: EM13361320

Description of Direct Labor Variances

Richie Ventura operates a commercial painting business in Sacramento, which has a very tight labor market. Much of his work focuses on newly constructed apartments and townhouses.

The following data relate to crew no. 5 for a recently concluded period when 85 apartment units were painted:

-Three new employees were assigned to crew no. 5. Wages averaged $18.80 per hour for each employee; the crew took 2,550 hours to complete the work.
-Based on his knowledge of the operation, articles in trade journals, and conversations with other painters, Ventura established the following standards:
Typical hourly wage rate of crew personnel: $15
Anticipated crew time for each unit: 34 hours
-The paint quantity variance was $6,070F.
-The operation did not go as smoothly as planned, with customer complaints and problems being much higher than expected.

Answer the following showing complete work for each one:

A. Compute Ventura's direct-labor variances.
B. Is the direct-labor rate variance consistent with what you might expect in a tight labor market? Explain.
C. What has likely happened that would give rise to customer complaints?

Reference no: EM13361320

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