ACCT230 - Week 6 Homework

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Bryant and Stratton College, Buffalo *

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230

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Accounting

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Jun 13, 2024

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docx

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ACCT230 – Week 6 Homework – Chapter 9 Objective: Preparing the revenue budget, professional labor budget, overhead budget, other expenses budget, and budgeted income statement. Information Henry and Jones, partners in a sports management consulting firm, budgeted the following professional labor hours for the year ended December 31, 20--: Partners ....................................................... 4,000 Associates .................................................... 7,000 Staff ............................................................. 11,000 Partners have a billing rate of $200 per hour and actually earn $100 per hour. Associates bill out at $120 per hour and earn $60 per hour. Staff has a billing rate of $80 an hour and earns $40 per hour. Budgeted overhead and other expenses are as follows: Overhead: Depreciation—Equipment ..................... $ 40,000 Depreciation—Building ........................ 90,000 Fringe Benefits ...................................... 190,000 Photocopying ........................................ 22,000 Secretarial Support ................................ 230,000 Telephone/Fax ....................................... 31,000 Utilities ................................................. 43,000 Other Direct Expenses: Travel .................................................... $ 54,000 Meals .................................................... 18,000 Directions: 1. Using the schedule below, prepare a revenue budget for the year ended December 31, 20--. Henry and Jones Revenue Budget For the Year Ended December 31, 20-- Item Professional Hours Billing Rate Total Revenues Partners ......................... 4,000 $200 $800,000 Associates ...................... 7,000 $120 $840,000 Staff ............................... 11,000 $80 $880,000 Total .......................... 22,000 $2,520,000

2. Using the schedule below, prepare a professional labor budget for the year ended December 31, 20--. Henry and Jones Professional Labor Budget For the Year Ended December 31, 20-- Item Professional Hours Wage Rate Total Labor Dollars Partners ......................... 4,000 $100 $400,000 Associates ...................... 7,000 $60 $420,000 Staff ............................... 11,000 $40 $440,000 Total .......................... 22,000 $1,260,000 3. Using the schedule below, prepare an overhead budget for the year ended December 31, 20--. Henry and Jones Overhead Budget For the Year Ended December 31, 20-- Item Amount Secretarial Support .............................................................. $ 230,000 Fringe Benefits .................................................................... $190,000 Depreciation—Building ...................................................... $90,000 Utilities ............................................................................... $43,000 Depreciation—Equipment ................................................... $40,000 Telephone/Fax ..................................................................... $31,000 Photocopying ...................................................................... $22,000 Total ................................................................................ $646,000 4. Using the schedule below, prepare an other direct expenses budget for the year ended December 31, 20--. Henry and Jones Other Direct Expenses Budget For the Year Ended December 31, 20-- Item Amount Travel .................................................................................. $ 54,000 Meals .................................................................................. $18,000 Total ................................................................................ $72,000

5. Using the schedule below, prepare a budgeted income statement for the year ended December 31, 20--. Henry and Jones Budgeted Income Statement For the Year Ended December 31, 20-- Revenues ............................................................................. $ 2,520,000 Operating Costs: Professional Labor .......................... $ 1,260,000 Overhead Support ......... $646,000 Other Direct Expenses ..................... $ 72,000 $1,978,000 Operating Income ................................................................ $542,000

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