Exercise 17-38 (Algo) Flexible Budgeting, Service Organization (LO 17-6) Kentford Associates is a small professional services firm. Last month, Kentford billed more hours than expected and profits reflected this. Billable hours Revenue Professional salaries (all variable) Other variable costs (e.g., supplies, computer services) Fixed costs Profit Reported Income Statement 5,841 $ 1,196,000 524,000 177,600 260,000 $ 234,400 Flexible Budget Master Budget 5,436 $ 1,152,000 518,000 158,000 293.000 $ 183,000 *These are hours billed to clients. They are fewer than the number of hours worked because there is nonbillable time (e.g, slack periods, time in training sessions) and because some time worked for clients is not charged to them. Required: Prepare a flexible budget for Kentford. Use billable hours as the measure of output (that is, units produced). Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.
Exercise 17-38 (Algo) Flexible Budgeting, Service Organization (LO 17-6) Kentford Associates is a small professional services firm. Last month, Kentford billed more hours than expected and profits reflected this. Billable hours Revenue Professional salaries (all variable) Other variable costs (e.g., supplies, computer services) Fixed costs Profit Reported Income Statement 5,841 $ 1,196,000 524,000 177,600 260,000 $ 234,400 Flexible Budget Master Budget 5,436 $ 1,152,000 518,000 158,000 293.000 $ 183,000 *These are hours billed to clients. They are fewer than the number of hours worked because there is nonbillable time (e.g, slack periods, time in training sessions) and because some time worked for clients is not charged to them. Required: Prepare a flexible budget for Kentford. Use billable hours as the measure of output (that is, units produced). Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Exercise 17-38 (Algo) Flexible Budgeting, Service Organization (LO 17-6)
Kentford Associates is a small professional services firm. Last month, Kentford billed more hours than expected and profits reflected
this.
Billable hours
Revenue
Professional salaries (all variable).
Other variable costs (e.g., supplies, computer services)
Fixed costs
Profit
Revenue
Costs
"These are hours billed to clients. They are fewer than the number of hours worked because there is nonbillable time (e.g., slack
periods, time in training sessions) and because some time worked for clients is not charged to them.
Professional salaries
Other variable costs
Fixed costs
Required:
Prepare a flexible budget for Kentford. Use billable hours as the measure of output (that is, units produced).
Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.
Total costs
Reported Income
Statement
Profit
5,841
$ 1,196,000
524,000
177,600
260,000
$ 234,400
Flexible Budget
(based on actual of
5,841 hours)
Master Budget
5,436
$ 1,152,000
518,000
158,000
293,000
$ 183,000
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