John Oyler is the rooms department manager of the Runners Club. The wages budget for his department is divided between fixed and variable expenses. The work standard for room attendants is to clean two rooms per hour. The average wage rate per hour is 8.00. The variable wages budget for room attendants for June is $8,400 based on $8.00 per hour, 100 rooms, 30 days a month and 70 percent occupany.
During June, room attendants worked 1,140 hours and the average hourly pay was $7.80. In addition, 2300 rooms were cleaned.
Determine the budget variance for room attendant variable wage expense.
Is the budget variance determined in #1 above significant? Explain
Rate John’s performance in managing the room attendants. Support your discussion with specific numbers.
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