EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner time has a $550 budgeted price and $270 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 7,900 billable partner-hours and 35,700 staff-hours. Actual results were as follows. Partner revenue $ 4,025,000 7,500 hours Staff revenue $ 4,580,000 35,000 hours d. Compute the total sales quantity variance.
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.
EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner time has a $550 budgeted price and $270 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 7,900 billable partner-hours and 35,700 staff-hours. Actual results were as follows.
| Partner revenue | $ | 4,025,000 | 7,500 | hours | |
| Staff revenue | $ | 4,580,000 | 35,000 | hours | |
d. Compute the total sales quantity variance.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
