Using the data provided in the Data Task B worksheet, complete the flexible budget for T&K Solutions
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Question:
Using the data provided in the ‘Data Task B’ worksheet, complete the flexible budget for T&K Solutions and calculate flexible budget variances using the proforma in ‘Schedule 2’. For each variance, indicate if it is U (unfavourable), F (favourable)
2018 BUDGETED DATA | Taxation | Bookkeeping | Advisory | Total | |
Billable hours | 4400 | 1200 | 5200 | 10800 | |
Professional labour hours | 4600 | 1320 | 5720 | 11640 | |
Charge out rate per billable hour | $ 210.00 | $ 180.00 | $ 210.00 | ||
Professional labour per worked hour | $ 90.00 | $ 75.00 | $ 90.00 | ||
Variable overhead | $ 145,000 | Note 1 | |||
Fixed overhead | $ 610,000 | Note 2 | |||
2018 ACTUAL COSTS | Taxation | Bookkeeping | Advisory | Total | |
Billable hours | 4200 | 1400 | 5900 | 11500 | |
Professional labour hours | 4400 | 1500 | 6400 | 12300 | |
Charge out rate per billable hour | $ 210.00 | $ 185.00 | $ 210.00 | ||
Professional salary paid | $ 386,000 | $ 112,500 | $ 586,000 | ||
Actual variable overhead paid | $ 162,000 | Note 1 | |||
Actual fixed overheads paid | $ 597,000 | Note 2 | |||
Note 1: Variable overhead varies with the billable hours | |||||
Note 2: The partners have decided a fair allocation of fixed overheads is as a percentage of floor space. | |||||
Taxation | Bookkeeping | Advisory | Total | ||
Floor Space by service | 130 | 55 | 195 | 380 | sqm |
TASK B SCHEDULE 2: | Prepare the Flexible Budgets for each service department for the year 2018 | ||||||
Allocation of variable overhead: | Budgeted | Actual | |||||
Variable overhead rate: | per billable hour | ||||||
TAXATION | |||||||
Billable hours | Actual | Flexible budget variance | U/F | Flexible Budget | Volume variance | U/F | Static Budget |
4,200 | - | - | 4,200 | 200 | U | 4,400 | |
Revenue | |||||||
Professional salaries | |||||||
Variable overhead | |||||||
Fixed overheads | |||||||
Profit / Loss | |||||||
BOOKKEEPING | |||||||
Billable hours | Actual | Flexible budget variance | U/F | Flexible Budget | Volume variance | U/F | Static Budget |
Revenue | |||||||
Professional salaries | |||||||
Variable overhead | |||||||
Fixed Overhead | |||||||
Profit / Loss | |||||||
ADVISORY | |||||||
Billable hours | Actual | Flexible budget variance | U/F | Flexible Budget | Volume variance | U/F | Static Budget |
Revenue | |||||||
Professional salaries | |||||||
Variable overhead | |||||||
Fixed Overhead | |||||||
Profit / Loss |
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Related Book For
Principles of Cost Accounting
ISBN: 978-1305087408
17th edition
Authors: Edward J. Vanderbeck, Maria Mitchell
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