Question: Stevie McQueen has run Zippy Car Detailing for the past

Stevie McQueen has run Zippy Car Detailing for the past 10 years. His static budget and actual results for June 2013 are pro-vided next. Stevie 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. Stevie pays his experienced employee $ 30 per vehicle and the other two employees $ 15 per vehicle. There were no wage increases in June.
Flexible Budgets, Cost Variances, and Management Control

1. How many cars, on average, did Stevie budget for each employee? How many cars did each employee actually detail?
2. Prepare a flexible budget for June 2013.
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, should Stevie gather in order to improve operationalefficiency?

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  • CreatedJanuary 15, 2015
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