K&B is a small management consulting firm. Last month, the firm billed fewer hours than...
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Accounting
K&B is a small management consulting firm. Last month, the firm billed fewer hours than expected, and, as expected, profits were lower than anticipated.
Reported Income Statement
Master Budget
Billable hoursa
7,290
9,450
Revenue
$
679,000
$
819,000
Professional salaries (all variable)
344,500
404,500
Other variable costs (e.g., supplies, computer services)
98,900
120,900
Fixed costs
206,800
201,800
Profit
$
28,800
$
91,800
aThese 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 K&B. Use billable hours as the measure of output (that is, units produced). (Do not roundintermediate calculations. Enter your answers rounded to the nearest whole dollar.)
Answer & Explanation
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