Exercise 17-36 (Algo) Sales Price and Activity Variances (LO 17-5)EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner time has a $600 budgeted price and $300 budgeted variable cost. Each billable hour of staff time has a budgeted price of $130 and a budgeted variable cost of $60. For the most recent year, the partnership budget called for 8,200 billable partner-hours and 32,750 staff-hours. Actual results were as follows. Partner revenue$4,580,000 7,800hoursStaff revenue$4,185,000 32,000hours Required:a. Compute the sales price variance.b. Compute the total sales activity variance.c. Compute the total sales mix variance.d. Compute the total sales quantity variance.(For all requirements, do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select e

Sales price variance is the difference between the actual sales price made by the firm and the sales…

Answered: Exercise 17-36 (Algo) Sales Price and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 17-36 (Algo) Sales Price and Activity Variances (LO 17-5)

EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner time has a $600 budgeted price and $300 budgeted variable cost. Each billable hour of staff time has a budgeted price of $130 and a budgeted variable cost of $60. For the most recent year, the partnership budget called for 8,200 billable partner-hours and 32,750 staff-hours. Actual results were as follows.


Partner revenue	$	4,580,000	7,800	hours
Staff revenue	$	4,185,000	32,000	hours

Required:

a. Compute the sales price variance.

b. Compute the total sales activity variance.

c. Compute the total sales mix variance.

d. Compute the total sales quantity variance.

(For all requirements, do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select e

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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