Justice township tries to keep tight control over the costs of the municipal court system. Since the town is small, its courts operate only a few days a week, and they get by largely with part-time workers. Last month it was expected that court stenographers would cost $25,000, but they actually cost $30,000, which is 20 percent more than the budgeted amount. The municipal judge has argued that the bench heard more cases than expected, and this caused the increase. The director of the town’s budget office feels that a 20 percent variance is unreasonable. As an analyst for the budget office, you have been asked to explain the variance . Your investigation shows that it was expected that there would be 125 trial stenographers would be paid $20 per hour, and each trial would take an average 10 hours. Actually, there were 150 trials, lasting 8 hours each on average, and stenographers earned $25 per hour. Calculate the volume, quantity, and rate variances, and provide some possible explanations for each.
The grey cells need to be filled out and It needs to be completed in the format based on the screenshot of the excel I pasted below, there are two sheets the prof wants us to fill in:
What do I fill in the grey shaded cells
Homework Answers
| Solution: | ||||
| Apart from attached sheet image, please see below: | ||||
| VQA | Flex | |||
| Actual | Budget | Budget | Budget | |
| Number of trails (Vol) | 150 | 125 | 125 | 125 |
| Hours per trial (qty) | 8 | 10 | 10 | 10 |
| Payment per query (price) | 25 | 20 | 20 | 20 |
| Total | 30000 | 25000 | 25000 | 25000 |
| Variance due to volume | -5000 | |||
| Variance due to quantity | 6000 | |||
| Variance due to price | -6000 | |||
| Total variance | -5000 |
 |
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