The CPA Firm. Tom Brodbeck, administrative partner in a CPA firm, has developed a concept of the perfect mix of personnel to handle the type of client work load this firm has enjoyed for several years. He thinks the ratio should be one partner, three managers, and eight staff accountants. The firm's budget for the work year called for 36 persons and an ideal mix. Because of promotions, new hires, and resignations, the average mix for the year was four partners, seven managers, and 29 staff accountants. The budgeted and actual salary expenses (with headcounts in parentheses) were:

Tom is reviewing this year's results. He sees that salaries are \(\$ 156,000\) above budget.
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1. Prepare an analysis that will show the mix and yield variances for the firm's staff this year. Remember to identify the salary variance first.
2. Comment on the \(\$ 156,000\) salary difference between budget and actual.
3. The ideal staffing ratio should generate 1,500 hours of billable time per person. Billable time is the time charged to clients. Tom knows that 64,000 billable hours were worked this year. Comment on the impact of this fact on the firm's profitability, and explain how you might analyze the chargeable hours data.

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Partners... Managers Staff accountants. Total salaries Budgeted Salaries $ 360,000 (3) 720,000 (9) 936,000 (24) Actual Salaries $440,000 (4) 630,000 (7) 1,102,000 (29) $2,016,000 (36) $2,172,000 (40)