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C24 H G E D B A F I J K Galler Tax Services specializes in preparing individual tax returns. Revenue is earned from completed returns for all clients. Direct labour for part-time preparers is the primary cost of the company. Roy Galler, the owner, has received the following performance report for the current year: 1 Variances 40 U $7,440 U 2 3 Galler Tax Services 4. Performance Report 3 For the Year Ended June 30, 2021 6 7 Actual Budget 8 Number of returns 500 540 9 Service fees $101,910 $109,350 10 Variable costs: 11 Direct labour 54,820 58,455 2 Supplies 1,830 2,025 13 Utilities 4,750 5,940 14 Training 4,090 4,590 15 Overhead 32,550 35,100 16 Total variable costs 98,040 106,110 17 Contribution margin 3,870 3,240 3,100 2,500 18 Fixed overhead $770 $740 19 Operating income (loss) 20 21 Required: 22 1. Is the original performance report useful? Why or why not? (2 marks) 23 Useful 25 26 Reason 3,635 F 195 F 1,190 F 500 F 2,550 F 8,070 F 630 F 600 U $30 F 24 29 2. Prepare a performance report using the flexible budget approach. (11 marks) Note: You may not need to use all the blue and green hightlighted cells. 30 31 32 33 34 Galler Tax Services Flexible Budget Performance Report For the Year Ended June 30, 2021 35 36 37 Per return Actual Budget Variances 38 Number of retums 39 Service fees 40 Variable costs: 41 Direct labour 42 Supplies 43 Utilities 44 Training 45 Overhead 46 Total variable costs 47 Contribution margin 48 Fixed overhead 49 Operating income (loss) 50 51 3. Based on the performance report in part 2, does Galler need to be concerned? Why or why not? (2 marks) 2 3 Concerned 4 Based on the performance report in part 2, does Galler need to be concerned? Why or why not? (2 marks) Concerned Reason