Maxwell Mechanical Inc. specializes in servicing central air-conditioning units.
Maxwell Mechanical employs licensed HVAC technicians and apprentices. Each
service call requires a combination of both types of labor.
Maxwell's standard time and cost for each service call are as follows.
HVAC technician
Apprentice
Time
1.0 hour
3.0 hours
Wage
$30/hour
$14/hour
During the month of May, Maxwell serviced 1,500 air-conditioning units. HVAC
technicians worked a total of 1,900 hours with a total labor cost of $60,800.
Apprentices worked a total of 4,000 hours with a total labor cost of $52,000. The
service calls require a certain amount of direct materials. For the month of May,
Maxwell experienced a favorable direct materials price variance of $5,000 and an
unfavorable direct materials usage variance of $8,000.