fill the answer sheet II Garza and Neely CPAs are preparing

fill the answer sheet!

II. Garza and Neely CPAs, are preparing their service revenue (sales) budget for the coming year (2017). The practice is divided into the three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below. Department Auditing Tax Consulting Quarter 1 2,300 3,000 1,500 Quarter 2 1,600 2,200 1,500 Quarter 3 2,000 2,000 1,500 Quarter 4 2,400 2,500 1,500 Average hourly billing rates are auditing $80, tax $90, and consulting $100. Instructions Prepare the service revenue (sales) budget for 2017 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue. III. Thome Company uses a flexible budget for manufacturing overhead based on direct labor hours Variable manufacturing overhead costs per direct labor hour are as follows Indirect labor Indirect materials Utilities $1.00 0.60 0.40 Fixed overhead costs per month are supervision $4,000, depreciation $1,200, and property taxes $800. The company believes it will normally operate in a range of 7,000 10,000 direct labor hours per month Instructions Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity using increments of 1,000 direct labor hours

Solution

II. Service revenue (Sales) Budget for the year ending December 31, 2017

Quarter 1

Quarter 2

Quarter 3

Quareter 4

Year 2017:

Department	Billable hours	Billable Rates	Total Revenue
Auditing	2300	$80	$184,000
Tax	3000	$90	$270,000
Consulting	1500	$100	$150,000
Total			$604,000