Question

According to its original plan, Bailey Consulting Services Company plans to charge its customers for service at $160 per hour in 2014. The company president expects consulting services provided to customers to reach 45,000 hours at that rate. The marketing manager, however, argues that actual results may range from 40,000 hours to 50,000 hours because of market uncertainty. Bailey’s standard variable cost is $60 per hour, and its standard fixed cost is $1,800,000.

Required
Develop flexible budgets based on the assumptions of service levels at 40,000 hours, 45,000 hours, and 50,000 hours.



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  • CreatedFebruary 07, 2014
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