(Solved by Humans)-According to its original plan, Bailey Consulting Services
Question
According to its original plan, Bailey Consulting Services Company plans to?charge its customers for service at $128 per hour in 2014. The company president expects consulting services provided to customers to reach 53,000 hours at that rate. The marketing manager, however, argues that actual results may range from 49,000 hours to 57,000 hours because of market uncertainty. Bailey's standard variable cost is $43 per hour, and its standard fixed cost is $1,320,000.
?
| Required |
| Prepare flexible budgets based on the assumptions of service levels at 49,000 hours, 53,000 hours, and 57,000 hours. |
Given,
Rate per hour
Variable Cost
$128
$43
Flexible Budget:
Service Revenue
Less:
Variable Cost
Fixed Cost
Net Revenue
Activity Level
49,000
53,000
57,000
$6,272,000 $6,784,000 $7,296,000...
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