Variance analysis, nonmanufacturing setting. Joyce Brown has run Medical Maids, a specialty clean- ing service for medical and dental offices, for the past 10 years. Her static budget and actual results for April 2017 are shown below. Joyce has one employee who has been with her for all 10 years that she has been in business. In addition, at any given time she also employs two other less-experienced workers. It usually takes each em- ployee 2 hours to clean an office, regardless of his or her experience. Brown pays her experienced employee $30 per office and the other two employees $15 per office. There were no wage increases in April. Medical Maids Actual and Budgeted Income Statements For the Month Ended April 30, 2017 Budget Actual 160 Offices cleaned 140 $36,000 $26,600 Revenue Variable costs: Costs of supplies 630 680 Labor 3,360 3,990 22,610 4,900 $17,710 4,200 Total variable costs 4,880 31,120 4,900 $26,220 Contribution margin Fixed costs Operating income
Variance analysis, nonmanufacturing setting. Joyce Brown has run Medical Maids, a specialty clean- ing service for medical and dental offices, for the past 10 years. Her static budget and actual results for April 2017 are shown below. Joyce has one employee who has been with her for all 10 years that she has been in business. In addition, at any given time she also employs two other less-experienced workers. It usually takes each em- ployee 2 hours to clean an office, regardless of his or her experience. Brown pays her experienced employee $30 per office and the other two employees $15 per office. There were no wage increases in April. Medical Maids Actual and Budgeted Income Statements For the Month Ended April 30, 2017 Budget Actual 160 Offices cleaned 140 $36,000 $26,600 Revenue Variable costs: Costs of supplies 630 680 Labor 3,360 3,990 22,610 4,900 $17,710 4,200 Total variable costs 4,880 31,120 4,900 $26,220 Contribution margin Fixed costs Operating income
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 19E: The normal capacity of a manufacturing plant is 30,000 direct labor hours or 20,000 units per month....
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Q.How many offices, on average, did Brown budget for each employee? How many offices did each employee actually clean?
Transcribed Image Text:Variance analysis, nonmanufacturing setting. Joyce Brown has run Medical Maids, a specialty clean-
ing service for medical and dental offices, for the past 10 years. Her static budget and actual results for April 2017
are shown below. Joyce has one employee who has been with her for all 10 years that she has been in business.
In addition, at any given time she also employs two other less-experienced workers. It usually takes each em-
ployee 2 hours to clean an office, regardless of his or her experience. Brown pays her experienced employee $30
per office and the other two employees $15 per office. There were no wage increases in April.
Medical Maids Actual and Budgeted Income
Statements For the Month Ended April 30, 2017
Budget
Actual
160
Offices cleaned
140
$36,000
$26,600
Revenue
Variable costs:
Costs of supplies
630
680
Labor
3,360
3,990
22,610
4,900
$17,710
4,200
Total variable costs
4,880
31,120
4,900
$26,220
Contribution margin
Fixed costs
Operating income
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