Oakman Accounting Partners is a small tax and accounting services firm. Each billable hour of partner time has a $960 budgeted price and $450 budgeted variable cost. Each billable hour of staff time has a budgeted price of $250 and a budgeted variable cost of $150. For the most recent year, the partnership budget called for 7,500 billable partner-hours and 30,000 staff-hours. Actual results were as follows: Partner revenue Staff revenue $ 7,675,000 $ 8,120,000 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. 7,800 hours 33,000 hours Note: 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 either option.
Oakman Accounting Partners is a small tax and accounting services firm. Each billable hour of partner time has a $960 budgeted price and $450 budgeted variable cost. Each billable hour of staff time has a budgeted price of $250 and a budgeted variable cost of $150. For the most recent year, the partnership budget called for 7,500 billable partner-hours and 30,000 staff-hours. Actual results were as follows: Partner revenue Staff revenue $ 7,675,000 $ 8,120,000 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. 7,800 hours 33,000 hours Note: 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 either option.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Q10.
Transcribed Image Text:Oakman Accounting Partners is a small tax and accounting services firm. Each billable hour of partner time has a $960 budgeted
price and $450 budgeted variable cost. Each billable hour of staff time has a budgeted price of $250 and a budgeted variable cost of
$150. For the most recent year, the partnership budget called for 7,500 billable partner-hours and 30,000 staff-hours. Actual results
were as follows:
Partner revenue
Staff revenue
$ 7,675,000
$ 8,120,000
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.
a. Partner
a. Staff
b. Sales activity variance
c. Sales mix variance
d. Sales quantity variance
7,800 hours
33,000 hours
Note: 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 either option.
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