Business, 19.04.2021 15:50 sarahhans6711

EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner time has a $800 budgeted price and $375 budgeted variable cost. Each billable hour of staff time has a budgeted price of $210 and a budgeted variable cost of $120. For the most recent year, the partnership budget called for 5,000 billable partner-hours and 20,000 staff-hours. Actual results were as follows: Partner revenue $4264,000 5200 hours
Staff revenue $4510,000 22,000 hours

Required
Compute the sales price and activity variances for these data. Also compute the mix and quantity variances.

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Answer from: Tok

EZ-Tax

Partner Staff Total

a. Sales price variance $104,000 ($110,000) ($6,000) U

b. Activity variance $160,000 $420,000 $580,000 F

c. Mix variance $85,000 $180,000 $265,000 F

d. Quantity variance $189,000 $70,000 $259,000 F

Explanation:

a) Data and Calculations:

Partner Staff

Budgeted billable rate per hour $800 $210

Budgeted variable cost per hour 375 120

Budgeted billable hours 5,000 20,000

Budgeted revenue $4,000,000 $4,200,000

Budgeted variable cost 1,875,000 2,400,000

Actual revenue $4,264,000 $4,510,000

Actual billable hours 5,200 22,000

Actual billable rate per hour $820 $205

Budgeted billable rate per hour $800 $210

Variance in price $20 ($5)

Sales price variance $104,000 ($110,000) ($6,000)

Sales price variance = (Standard price - Actual price) * Actual billable hours

= ($800 - $820) * 5,200 + ($210 - $205) * 22,000

= $20 * 5,200 + ($5) * 22,000

= $104,000 - 110,000

= $6,000 U

Activity variance = (Actual billable hours - Standard billable hours) * Standard rate

= (5,200 - 5,000) * $800 + (22,000 - 20,000) * $210

= (200 * $800) + (2,000 * 210)

= $160,000 + 420,000

= $580,000 F

Partner Staff Total

Budgeted revenue $4,000,000 $4,200,000 $8,200,000

Budgeted variable cost 1,875,000 2,400,000 4,275,000

Budgeted contribution $2,125,000 $1,800,000 $3,925,000

Actual revenue $4,264,000 $4,510,000 $8,774,000

Actual variable cost 1,950,000 2,640,000 4,590,000

Actual contribution $2,314,000 $1,870,000 $4,184,000

Quantity variance $189,000 $70,000 $259,000

Quantity variance = Budgeted contribution - Actual contribution

= $3,925,000 - $4,184,000

= $259,000 F

Mix Variance:

Standard contribution margin $425 $90

Volume variance 200 2,000

Mix variance = $85,000 $180,000

Answer from: Quest

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101

Answer from: Quest

E? pretty sure let me know the answer

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EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner t...

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