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PR 9-41 (Algo) Revised Operating Budget; Consulting Firm (LO 9-2, 9-5, 9-7) Toronto Business Associates, a division of Maple Leaf Services Corporation, offers management and computer consulting services to clients throughout Canada and the northwestern United States. The division specializes in website development and other internet applicetions The comporate manapement at Maple Leaf Services is pleased with the performance of Toronto Business. Assoclates for the first nine months of the current year and has recommended that the division manoger. Richard Wu, submit a revised forecast for the remaining quarter, as the division has exceeded the annual plan year-to-date by 20 percent of operating income. An unexpected increase in bllied-hour volume over the original plan is the main reason for this increase in income. The original operating budget for the first three quarters for Toronto Business Associates follows Wu will reflect the following information in his revised forecast for the fourth quarter. - Toronto Business Assoclates currently has 25 consultants on stat, 10 . for management consulting and 15 for computer systems consulting. Three additional management consultants hove been hired to start work at the beginning of the fourth quarter in order to meet the increased client demand. - The houtly billing rate for consuling revente wil remain at $90 per hour for each manogement consutant and $75 per hour for each computer consultant. However, due to the fovorable increase in billing hour yolume when compared to the plan, the hours for each consultant will be increased by 50 hours per quarter - The budgeted annual salaries and actual annual salaries, paid monthly, are the same: $56,000 for a management consultant and $52.000 for a computer consultant. Corporate management has opproved a merit increase of 10 percent at the beginning of the fourth quarter for all 25 exiting consultants, while the new consuttants wilt be compensated at the planned rote: - The planned salary expense includes a provision for employee fringe benefits amounting to 30 pereent of the annual salaries. However, the improvement of some corporatewide employee programs will increase the fringe benefits to 40 percent. - The original plan assumes a fixed hourly rate for travel and other related expenses for each billing hour of consulting. These are expenses that are not reimbursed by the client, and the previously determined hourly rate has proven to be adequate to cover these costs. - Other revenue is derived from temporary rentals and interest income and remains unchanged for the fourth quarter. - Generat and administrative expenses have been favorable at 7 percent below the plan; this 7 percent savings on fourth quarter expenses will be reflected in the revised plan. - Depreciation of office equipment and personal computers will stay constant at the projected straight-fine rate. - Due to the favorable experience for the first three quarters and the division's increased ability to absorb costs, the corporate management at Maple Leaf Services has increased the corporate expense allocation by 50 percent: Required: 1. Prepare a revised operating budget for the fourth cuarter for Toronto Business Assoclates that Richard Wu wil present to corporate management. 2. Which of the following circumistances would NOT require an organization to prepare a revised operating budget? Complete this question by entering your answers in the tabs below. Prepare a revised operating budget for the fourth quarter for Toronto Business Associotes that Richard Wu will present to corporate management. Prepare a revised operating budget for the fourth quarter for Toronto Business Associates that Richard Wu will present to corporate management: Required: 1. Prepare a revised operating budget for the fourth quarter for Toronto Business Associates that Richard Wu will present to. corporate management. 2. Which of the following circumstances would NOT require an organization to prepare a revised operating budget? Complete this question by entering your answers in the tabs below. Which of the following circumstances would NOT require an organization to prepare a revised operating budget

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