Question: Justice Township tries to keep tight control over the costs of the municipal court...
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Question: 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 many more cases than expected, and this caused the increase. The director of the towns 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 trials, stenographers would be paid $20 per hour, and each trial would take an average of 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.
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