Marcus McQueen has run In-A-Flash Car Detailing for the past 10 years. His static budget and actual results for June 2017 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 \($15\) per vehicle. There were no wage increases in June.

1. How many cars, on average, did Marcus budget for each employee? How many cars did each employee actually detail?
2. Prepare a flexible budget for June 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 Marcus to gather, if you wanted to improve operational efficiency?

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In-A-Flash Car Detailing Actual and Budgeted Income Statements For the Month Ended June 30, 2017 Budget Actual Offices cleaned 280 320 Revenue $53,200 $72,000 Variable costs: Costs of supplies 1,260 1,360 Labor 6,720 8,400 Total variable costs 7,980 9,760 Contribution margin 45,220 62,240 Fixed costs 9,800 9,800 Operating income $35,420 $52,440