Medical Maids Actual and Budgeted Income Statements For the Month Ended April 30, 2017 Budget Actual Offices cleaned 140 160 Revenue $26,600 $36,000 Variable costs: Costs of supplies 630 680 Labor 3,360 4,200 Total variable costs 3,990 4,880 Contribution margin 22,610 31,120 Fixed costs 4,900 4,900 Operating income $17,710 $26,220 1. How many offices, on average, did Brown budget for each employee? How many offices did each employee actually clean? 2. Prepare a flexible budget for April 2017. 3. Compute the sales price variance and the labor efficiency variance for each labor type. 4. What information, in addition to that provided in the income statements, would you want Brown to gather, if you wanted to improve operational efficiency? Required
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
