Question

Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2020). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below. Department Quarter 1 Quarter 2 Quarter 3 Quarter 4 Auditing 2,450 1,840 2,330 2,710 Tax 3,130 2,650 2,300 2,800 Consulting 1,640 1,640 1,640 1,640 Average hourly billing rates are auditing $84, tax $94, and consulting $105. Prepare the service revenue (sales) budget for 2020 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

Answer 1

Answer and Explanation:

The Preparation of service revenue is prepared below:-

For Quarter 1    

                   Billable Hours      Billable rate          Total

Auditing        2,450                    84                     205,800

Tax                 3,130                    94                      294,220

Consulting     1,640                   105                     172,200

Total                                                                     672,220

For Quarter 2    

                    Billable Hours    Billable rate          Total

Auditing          1,840                   84                     154,560

Tax                  2,650                  94                     249,100

Consulting      1,640                  105                     172,200

Total                                                                      575,860

For Quarter 3

                   Billable Hours      Billable rate          Total

Auditing         2,330                      84                  195,720

Tax                 2,300                      94                 216,200

Consulting      1,640                      105               172,200

Total                                                                    584,120

For Quarter 4

                   Billable Hours      Billable rate          Total

Auditing           2,710                     84                  227,640

Tax                   2,800                    94                  263,200

Consulting       1,640                    105                  172,200

Total                                                                     663,040

Now the total revenue is

= $575,860 + $584,120 + $663,040

= $1,823,020