Joyce Brown has run Medical Maids, a specialty cleaning 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 employee 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. Required: 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? Medical Maids Actual and Budgeted Income Statements for the Month Ended April 30, 2017 Budget 140 $26.600 Actual 160 $36,000 Offices Cleaned Revenue Variable costs: Cost of supplies Labor Total variable costs Contribution margin Fixed costs Operating income 630 3.360 3,990 22,610 4,900 $17,710 680 4,200 4,880 31,120 4.900 $26.220 Actual Results (1) Flexible Budget Variances 101-1111 Flexible Budget Static Budget (3) Sales Volume Variance TAI-121-151 Focus93 (5) Ee Share ess you need to edit it's sales to stay in Protected View Enable Editing Statements for the Month Ended April 30, 2017 Budget Offices Cleaned 140 Revenue $26,600 Variable costs: Cost of supplies 630 Labor 3,360 Total variable costs 3.9920 Contribution margin 22,610 Fixed costs Operating income $17.710 160 $36,000 680 4,200 4,880 31,120 4,900 $26,220 4.900 Actual Results (1) Flexible Budget Static Budget Flexible Budget Variances (2) = (1) - (3) Sales Volume Variance (4) = (3) - (5) (5) Offices Cleaned Revenues Variable Costs Supplies Labor-experienced Labor-inexperienced Total Variable Costs Contribution Margin Fixed Costs Operating Income Focus B ella