Emplex is a payroll service. The firm takes over all record keeping, cheque writing, and remittances to

Fantastic news! We've Found the answer you've been seeking!

Question:

Emplex is a payroll service. The firm takes over all record keeping, cheque writing, and remittances to the government of payroll taxes and withholding amounts. The firm also provides premium services which consist of analysis of efficiency, bonuses, sick days, market rates of pay etc. These services are intended to help client firms make sure their employees are working efficiently and effectively. Clients pay an initial fee that covers the costs of setting up the account. After that, each client pays a monthly fee that is based on number of employees. Premium services are billed out at a negotiated rate which varies depending on the service desired, the complexity of the analysis, research requirements and any other unique aspects of the project.

Emplex employs a team of salespeople who are charged with finding new customers and liaising with existing customers. The salespeople receive a commission for each new customer they bring on board. Each month, data from all covered employees is processed electronically, but a few data entry people are employed who make sure the data is clean and properly formatted before it is processed. This team makes sure that the nuts and bolts of the monthly service works properly. There is also a large team of analysts, who are responsible for conducting and reporting on the premium services.

The static budget for the month of November follows:

	Budget	Actual	Variance
Clients (11/1)	3,393	3,393	--
Clients (11/30)	3,450	3,200	250
Employees Covered	5,175,000	5,286,000	111,000
New Clients	204	198	6
Premium Services	1,380	1,487	107

Onboarding Fees	$571,200	$619,542	$48,342
Monthly Charges	11,643,750	11,259,180	384,570
Premium Charges	6,210,000	7,777,010	1,567,010

Variable Costs
Commissions	102,000	99,000	3,000
Data Care	1,552,500	1,691,520	139,020
Customer Care	1,035,000	1,088,000	53,000

Fixed Costs
Depreciaton	4,300,000	4,300,000	--
Salaries	5,400,000	5,492,000	92,000

Prepare a flexible budget for Emplex for the month of November. Be sure to include activity variances. Label each variance appropriately and indicate for each the degree of significance. Document your computations and label them.