According to its original plan, Munoz Consulting Services Company plans to charge its customers for service at $125 per hour. The company president expects consulting services provided to customers to reach 55,000 hours at that rate. The marketing manager, however, argues that actual results may range from 49,000 hours to 61,000 hours because of market uncertainty. Munoz's standard variable cost is $46 per hour, and its standard fixed cost is $1,410,000.   Required Develop flexible budgets based on the assumptions of service levels at 49,000 hours, 55,000 hours, and 61,000 hours.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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According to its original plan, Munoz Consulting Services Company plans to charge its customers for service at $125 per hour. The company president expects consulting services provided to customers to reach 55,000 hours at that rate. The marketing manager, however, argues that actual results may range from 49,000 hours to 61,000 hours because of market uncertainty. Munoz's standard variable cost is $46 per hour, and its standard fixed cost is $1,410,000.

 

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Develop flexible budgets based on the assumptions of service levels at 49,000 hours, 55,000 hours, and 61,000 hours.

 

 

 
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