Norma Tuck is manager of The Tax Experts, a firm that provides assistance in the preparation of individual tax returns. Because of the highly seasonal nature of her business, Tuck hires staff on a monthly basis from two accounting placement firms - Professional Assist (PA) and Office Support (OS). In February, The Tax Experts hired 12 staff members from PA and 10 from OS. PA is the prestige firm in its area. OS is a recently formed firm. Tuck has compiled the following information for February:

Budgets for February	PA staff	OS staff
Budgeted hourly rate	$45	$40
Budgeted time per tax return in hours	0.40	0.50
Actual results for February	PA staff	OS staff
Actual hourly rate	$48	$42
Actual time per tax return in hours	0.42	0.46
Number of actual tax returns completed	4,608	3,600

Questions:

Determine the labor rate and efficiency variances for (a) the 12 PA staff and (b) the 10 OS staff hired in February.

Comment on the efficiency of the PA and OS staff hired by The Tax Experts.

Problem 2

Pacific Furniture is an elite desk manufacturer. At the start of March, the following budgeted unit amounts related to its manufacture of executive oak desks:

Direct materials: 16 square feet of oak per desk @ $20 per square foot

Direct manufacturing labor: 3 hours per desk @ $30 per labor hour

Budgeted production for March was 700 executive desks. There were no beginning inventories of direct materials or finished goods on March 1. Actual results for March are as follows:

Direct materials purchased: 12,640 square feet for $259,120

Direct materials used: 11,850 square feet

Direct manufacturing labor: 2,325 hours at $31.00 per hour

Actual production in March is 750 executive desk units.

Questions:

1. Compute the DM material & Quantity variances for March

2. Compute the DL Rate and Efficiency variances for March