Standards for Nonmanufacturing ExpensesCodeHead Software Inc. does software development. One importantactivity in software development...Standards...

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Accounting

Standards for Nonmanufacturing Expenses
CodeHead Software Inc. does software development. One importantactivity in software development is writing software code. Themanager of the WordPro Development Team determined that the averagesoftware programmer could write 25 lines of code in an hour. Theplan for the first week in May called for 4,650 lines of code to bewritten on the WordPro product. The WordPro Team has fiveprogrammers. Each programmer is hired from an employment firm thatrequires temporary employees to be hired for a minimum of a 40-hourweek. Programmers are paid $32.00 per hour. The manager offered abonus if the team could generate more lines for the week, withoutovertime. Due to a project emergency, the programmers wrote morecode in the first week of May than planned. The actual amount ofcode written in the first week of May was 5,650 lines, withoutovertime. As a result, the bonus caused the average programmer'shourly rate to increase to $40.00 per hour during the first week inMay.
Enter a favorable variance as a negative number using a minussign and an unfavorable variance as a positive number. If an amountis zero, enter "0" and choose "Not applicable" from thedropdown.
Required:
1. If the team generated 4,650 lines of codeaccording to the original plan, what would have been the labor timevariance?
$
2. What was the actual labor time variance as aresult of generating 5,650 lines of code?
$
3. What was the labor rate variance as a resultof the bonus?
$
4. Are there any performance-related issuesthat the labor time and rate variances fail to consider?
The labor rate and time variances the number of errors in thecode from programmer fatigue. A program that has will requiresignificant time for debugging at a later date. Thus, managers theefficiency of doing the work and also the quality of the work.
5. The manager is trying to determine if abetter decision would have been to hire a temporary programmer tomeet the higher programming demand in the first week of May, ratherthan paying out the bonus. If another employee was hired from theemployment firm, what would have been the labor time variance inthe first week?
$
6. Which decision is better, paying the bonusor hiring another programmer?

Answer & Explanation Solved by verified expert

3.6 Ratings (683 Votes)

The answer to the following requrements 1 Requirement Calculation of labour time variance labour Time Variance Actual HrsStandard HrsStandard Rate Actual Hrs taken 5 Programmers 40 hrs week 200 hrs Standard hrs for actual production 4650 Lines 25 186 hrs Standard Rate 32 Hence labour Time Variance 20018632 448 AdvUnfavorable 2 labour Time Variance Actual See Answer

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In: AccountingStandards for Nonmanufacturing ExpensesCodeHead Software Inc. does software development. One importantactivity in software development...Standards for Nonmanufacturing ExpensesCodeHead Software Inc. does software development. One importantactivity in software development is writing software code. Themanager of the WordPro Development Team determined that the averagesoftware programmer could write 25 lines of code in an hour. Theplan for the first week in May called for 4,650 lines of code to bewritten on the WordPro product. The WordPro Team has fiveprogrammers. Each programmer is hired from an employment firm thatrequires temporary employees to be hired for a minimum of a 40-hourweek. Programmers are paid $32.00 per hour. The manager offered abonus if the team could generate more lines for the week, withoutovertime. Due to a project emergency, the programmers wrote morecode in the first week of May than planned. The actual amount ofcode written in the first week of May was 5,650 lines, withoutovertime. As a result, the bonus caused the average programmer'shourly rate to increase to $40.00 per hour during the first week inMay.Enter a favorable variance as a negative number using a minussign and an unfavorable variance as a positive number. If an amountis zero, enter "0" and choose "Not applicable" from thedropdown.Required:1. If the team generated 4,650 lines of codeaccording to the original plan, what would have been the labor timevariance?$2. What was the actual labor time variance as aresult of generating 5,650 lines of code?$3. What was the labor rate variance as a resultof the bonus?$4. Are there any performance-related issuesthat the labor time and rate variances fail to consider?The labor rate and time variances the number of errors in thecode from programmer fatigue. A program that has will requiresignificant time for debugging at a later date. Thus, managers theefficiency of doing the work and also the quality of the work.5. The manager is trying to determine if abetter decision would have been to hire a temporary programmer tomeet the higher programming demand in the first week of May, ratherthan paying out the bonus. If another employee was hired from theemployment firm, what would have been the labor time variance inthe first week?$6. Which decision is better, paying the bonusor hiring another programmer?