Sharmila Khan is manager of TaxExperts.co.uk, a firm that provides assistance in the preparation of individual tax returns via the internet. Because of the highly seasonal nature of her business, Sharmila employs staff on a monthly basis from two accounting placement firms – Professional Assist (PA) and Office Support (OS). In July 2022, TaxExperts.co.uk took on 12 staff members from PA and 10 from OS. PA is the prestige firm in its area. OS is a recently formed firm.

Sharmila budgets the following for July 2022:

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Budgeted hourly rate Budgeted time per tax return in hours PA staff 45 0.40 OS staff 40 0.50 Actual results for July 2022 were as follows: PA staff OS staff Actual hourly rate 48 42 Actual time per tax return in hours 0.42 0.46 Number of tax returns completed 4608 3600 Required 1 Calculate professional labour price and efficiency variances for (a) the 12 PA staff, and (b) the 10 OS staff employed in July 2022. 2 Comment on the efficiency of the PA and OS staff TaxExperts.co.uk employed. 3 What factors other than efficiency might Khan consider in deciding whether to employ staff from PA or OS?