Adam Holmes is the Processing Manager of Empire Mortgage Company, a firm that processes loan applications for
Question:
Adam Holmes is the Processing Manager of Empire Mortgage Company, a firm that processes loan applications for a number of regional builders. Home buying and therefore mortgage processing is a highly seasonal business, and requires temporary staff during busy processing periods. Holmes hires staff on a monthly basis from two different temporary staffing firms - Professional Temps (PT) and Support on Demand (SD). In June, Empire hired 14 staff members from PT and 10 from SD. PT is a more established firm and SD is a newly organized firm in the staffing market. Holmes has compiled the following information for June:
Budgets for June | PT staff | SD staff |
Budgeted hourly rate | $50 | $45 |
Budgeted time per app. (hours) | 1.2 | 1.4 |
Actual results for June | PT staff | SD staff |
Actual hourly rate | $52 | $47 |
Actual time per app. (hours) | 1.4 | 1.2 |
Number of actual apps completed | 2,604 | 1,600 |
Questions:
- Determine the labor rate and efficiency variances for (a) the 14 PT staff and (b) the 10 SD staff hired in June.
- Comment on the efficiency of the PT and SD staff hired by Empire Mortgage.
Managerial Accounting An Introduction to Concepts Methods and Uses
ISBN: 978-0324639766
10th Edition
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil