Variance analysis, nonmanufacturing setting. Marcus McQueen has run In-A-Flash Car Detailing for the past 10 years. His static budget and actual results for June 2014 are provided next. Marcus has one employee who has been with him for all 10 years that he has been in business. In addition, at any given time he also employs two other less experienced workers. It usually takes each employee 2 hours to detail a vehicle, regardless of his or her experience. Marcus pays his experienced employee $30 per vehicle and the other two employees SIS per vehicle. There were no wage increases in June.

In-A-FIash Car Detailing Actual and Budgeted Income Statements For the Month Ended June 30, 2014

Budget Actual
Cars detailed 280 320
Revenue $53,200 $72,000

Variable costs
Costs of supplies 1260 1360
Labor 6720 8400
Total variable costs 7980 9760
Contribution margin 45,220 62,240
Fixed costs 9800 9800
Operating income $35,420 $52,440

Required:
a. How many offices, on average, did Baker budget for each employee?
b. How many cars did each employee actually detail? 2. Prepare a flexible budget for April 2017.
c. Compute the sales price variance and the labor efficiency variance for each labor type.
d. What information, in addition to that provided in the income statements, would you want Baker to gather, if you wanted to improve operational efficiency?

5. profit maximization and shutting down in the short run suppose that the market for polos is a competitive market. the following graph shows the daily cost curves of a firm operating in this market. 0 2 4 6 8 10 12 14 16 18 20 50 45 40 35 30 25 20 15 10 5 0 price (dollars per polo) quantity (thousands of polos) mc atc avc for each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. assume that if the firm is indifferent between producing and shutting down, it will produce. (hint: you can select the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) price quantity total revenue fixed cost variable cost profit (dollars per polo) (polos) (dollars) (dollars) (dollars) (dollars) 12.50 135,000 27.50 135,000 45.00 135,000 if the firm shuts down, it must incur its fixed costs (fc) in the short run. in this case, the firm's fixed cost is $135,000 per day. in other words, if it shuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease). this firm's shutdown price—that is, the price below which it is optimal for the firm to shut down—is per polo.

When the national economy goes from bad to better, market research shows changes in the sales at various types of restaurants. projected 2011 sales at quick-service restaurants are $164.8 billion, which was 3% better than in 2010. projected 2011 sales at full-service restaurants are $184.2 billion, which was 1.2% better than in 2010. how will the dollar growth in quick-service restaurants sales compared to the dollar growth for full-service places?

The card shoppe needs to maintain 21 percent of its sales in net working capital. currently, the store is considering a four-year project that will increase sales from its current level of $349,000 to $408,000 the first year and to $414,000 a year for the following three years of the project. what amount should be included in the project analysis for net working capital in year 4 of the project?