Exercise 8-6A (Algo)

Using a flexible budget to accommodate market uncertainty LO 8-4 According to its original plan, Thornton Consulting Services Company plans to charge its customers for service at $130 per hour in Year 2. The company president expects consulting services provided to customers to reach 49,000 hours at that rate. The marketing manager, however, argues that actual results may range from 45,000 hours to 53,000 hours because of market uncertainty. Thornton's standard variable cost is $40 per hour, and its standard fixed cost is $1,460,000.

Required Develop flexible budgets based on the assumptions of service levels at 45,000 hours, 49,000 hours, and 53,000 hours.