Exercise 17-38 (Algo) Flexible Budgeting, Service Organization (LO 17-6) Kentford Associates is a small professional services firm. Last month, Kentford billed more hours than expected and profits reflected this. Billable hours Revenue Professional salaries (all variable) Other variable costs (e.g., supplies, computer services) Fixed costs Profit Reported Income Statement 5,841 $ 1,196,000 524,000 177,600 260,000 $ 234,400 Flexible Budget Master Budget 5,436 $ 1,152,000 518,000 158,000 293.000 $ 183,000 *These 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 Kentford. Use billable hours as the measure of output (that is, units produced). Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.

Exercise 17-38 (Algo) Flexible Budgeting, Service Organization (LO 17-6) Kentford Associates is a small professional services firm. Last month, Kentford billed more hours than expected and profits reflected this. Billable hours Revenue Professional salaries (all variable) Other variable costs (e.g., supplies, computer services) Fixed costs Profit Reported Income Statement 5,841 $ 1,196,000 524,000 177,600 260,000 $ 234,400 Flexible Budget Master Budget 5,436 $ 1,152,000 518,000 158,000 293.000 $ 183,000 *These 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 Kentford. Use billable hours as the measure of output (that is, units produced). Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 7E: Professional foes earned budget for a service company LundquistFret well. CPAs, offer three types of...

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Required Information [The following information applies to the questions displayed below] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below. Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month Amount of other expenses $50,000 $36.000 $ 35,000 Variable Element per Customer Served $5,000 $1,100 $ 600 Actual Total for May $ 160,000 $ 88,000 When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers. 4. What amount of other expenses would be included in Aager's flexible budget for May? $ 19,000 $ 34,500 28
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $ 950 Spending variance Actual Total for May $ 217,000 $ 128, 100 $ 35,300 $ 34,400 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. 8. What is Adger's travel expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month Variable Element per Customer $ 70,000 Served $ 6,300 $ 1,700 Actual Total for May $ 49,000 $ 199,000 $ 127,300 $ 620 $ 18,000 $ 46,100 When preparing its planning budget, the company estimated it would serve 30 customers per month; however, during May the company actually served 35 customers. 5. What net operating income would appear in Adger's flexible budget for May? Net operating income
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $ 950 Revenue variance Actual Total for May $ 217,000 $ 128,100 $ 35,300 $ 34,400 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. 6. What is Adger's revenue variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Kentford Associates is a small professional services firm. Last month, Kentford billed more hours than expected and profits reflected this. Billable hoursa Revenue Professional salaries (all variable) Other variable costs (e.g., supplies, computer services) Fixed costs Profit Reported Income Statement 5,805 Master Budget 5,400 $ 1,124,000 524,000 $ 1,080,000 500,000 156,000 260,000 140,000 275,000 $ 184,000 $ 165,000 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 sales activity variance analysis. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Revenue Costs: Professional salaries Other variable costs Fixed costs Total costs Profit Flexible…
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $ 950 Amount of travel expenses included in the flexible budget Actual Total for May $ 217,000 $ 128,100 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. 3. What amount of travel expenses would be included in Adger's flexible budget for May? $ 35,300 $ 34,400
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $ 950 Amount of revenue included in the planning budget 10. What amount of revenue would be included in Adger's planning budget for May? Actual Total for May $ 217,000 $ 128,100 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. $ 35,300 $ 34,400
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Employee salaries and wages Travel expenses Other expenses Variable Element per Customer Served $ 5,800 $ 1,800 $ 950 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. Actual Total for May $ 217,000 $ 128,100 $ 35,300 $ 34,400 15. What activity variances would Adger report with respect to each of its expenses for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no…
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $ 950 Activity variance Actual Total for May $ 217,000 $ 128,100 $ 35,300 $ 34,400 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. 14. What activity variance would Adger report in May with respect to its revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as…
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $950 Actual Total for May $ 217,000 $ 128,100 $ 35,300 $ 34,400 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. Amount of employees salaries and wages included in the planning budget 11. What amount of employee salaries and wages would be included in Adger's planning budget for May?
Required information [The following information applies to the questions displayed below.) Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Fixed Element Variable Element Actual per Customer Total per Month for May $ 182,000 $ 110,300 $ 27,200 $ 32,600 Served $ 5,600 $ 1,600 Revenue $ 55,000 Employee salaries and wages Travel expenses Other expenses 850 $ 34,000 When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers. 2. What amount of employee salaries and wages would be included in Adger's flexible budget for May? Amount of employee salaries and wages included in the flexible budget
View prevlous attempt Exercise 13-44 (Algo) Budgeting in a Service Organization: Solve for Unknown (LO 13-7) Jolly Cleaners offers residential and commercial cleaning services. Clients pay a fixed monthly fee for the service, but can cancel the service at the end of any month. In addition to the employees who do the actual cleaning, the firm includes two managers who handle the administrative tasks (human resources, accounting, and so on) and one dispatcher, who assigns the cleaning employees to jobs on a daily basis, On average, residential clients pay $280 per month for cleaning services and the commercial clients pay $1,400 per month. A typical residential client requires 10 hours a month for cleaning and a typical commercial client requires 50 hours a month. In March, Jolly Cleaners had 40 commercial clients and 200 residential clients. Cleaners are paid $10 per hour and are only paid for the hours actually worked. Supplies and other varlable costs are estimated to cost $5 per hour…