Standard Labor Variances
a CPA Firm Estimates That an Audit

Standard Labor Variances
A CPA firm estimates that an audit will require the following work: $$\begin{array} { | c | r | r | r | } \hline \begin{array} { r } \text { Type of } \\\text { Auditor }\end{array} & \begin{array} { r } \text { Expected } \\\text { Hours }\end{array} & \begin{array} { r } \text { Cost per } \\\text { Hour }\end{array} & \begin{array} { r } \text { Standard } \\\text { Costs }\end{array} \\\hline \text { Manager } & 10 & \$ 50 & \$ 500 \\\hline \text { Senior } & 20 & 40 & 800 \\\hline \text { Staff } & \underline{40} & 30 & \underline{1,200} \\\hline \text { Total } & 70 & & \$ 2,500 \\\hline\end{array}$$ The actual hours and costs were: $$\begin{array} { | c | r | r | r | } \hline \begin{array} { r } \text { Type of } \\\text { Auditor }\end{array} & \begin{array} { r } \text { Actual } \\\text { Hours }\end{array} & \begin{array} { r } \text { Actual Cost } \\\text { per Hour }\end{array} & \begin{array} { r } \text { Actual } \\\text { costs }\end{array} \\\hline \text { Manager } & 9 & \$ 52 & \$ 468 \\\hline \text { Senior } & 22 & 38 & 836 \\\hline \text { Staff } & \underline{44} & 30 & \underline{1,320} \\\hline \text { Total } & 75 & & \$ 2,624 \\\hline\end{array}$$ Required:
Calculate the direct labor, wage rate, and labor efficiency variances for each type of auditor and interpret.