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Bas_tet [7]
3 years ago
7

According to its original plan, Benson Consulting Services Company plans to charge its customers for service at $135 per hour in

2018. The company president expects consulting services provided to customers to reach 52,000 hours at that rate. The marketing manager, however, argues that actual results may range from 48,000 hours to 56,000 hours because of market uncertainty. Benson's standard variable cost is $40 per hour, and its standard fixed cost is $1,310,000. Required Develop flexible budgets based on the assumptions of service levels at 48,000 hours, 52,000 hours, and 56,000 hours.
Business
1 answer:
levacccp [35]3 years ago
7 0

Answer:

See budget below

Explanation:

<em>A flexible budget is that which is prepared for different level of activities. It suitable for a situation where there exist a lot of possible scenarios. It is usually prepared using the assumptions of a static budget</em>

The flexible budget would be prepared as followed:

 Consulting Services Company

                                     <em><u>   Flexibe budget for 2018</u></em>

<em>Activity level (hrs)               48,000    52,000    56,000</em>

                                             $'000      $'000        $'000

Sales revenue ($135/hr)       6,480       7,020       7,560

Variable cost                       <u>(1920)        ( 2080)     (2240)</u>

Contribution                       4,560         4,940        5,320

Fixed costs                     <u>    (1,310)           (1,310)       (1,310)   </u>

Profit                                 <u>3,250             3,630       4,010</u>

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The sum of the debits will exceed the sum of the credits by $340. (None of the options given).

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Answer:

$50.57 ; $175,573.6

Explanation:

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Below are departmental income statements for a guitar manufacturer. The manufacturer is considering eliminating its electric gui
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Answer and Explanation:

1. The preparation of the department contribution report is presented below:

                                        WHOLESALE GUITARS

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Gross Profit    $56,825                    $38,750                $95,575

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Depreciation Expenses  - Equipment   $10,150     $9,000     $19,150

Salaries Expenses       $17,300             $13,500                       $30,800

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Net Income              $27,345            $14,550                                $9,920

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