Question

Question 9 View Policies Current Attempt in Progress Thome and Crede, CPAs, are preparing their service revenue sales budget for the coming year (2020). The practice is divided into three departments hours for each department, by Quarter are provided below in tax and consulting Datable Department Auditing Quarter 1 2.500 2.320 1.720 Quarter 2 1.700 2.650 1.720 Quarter 3 2,330 2.240 1.720 Quarter 4 2.500 2.720 1.720 Consulting Averhourly billing rates are auditing sa tax $93, and consulting $102

Answer 1

Solution:

Paige Company

Sales Budget

Paige Company
Sales Budget
For the Year Ended December 31, 2020
			Quarter
	1	2	3	4	Year
Unit Sales	10,100	12,100	14,800	18,800	55,800
unit selling price	$82	$82	$82	$82	$82
Budgeted Sales	$828,200	$992,200	$1,213,600	$1,541,600	$4,575,600

Computations:

Budgeted sales = unit sales x unit selling price

Quarter 1 –

Budgeted sales = 10,100 x $82 = $828,200

Quarter 2 –

Budgeted sales = 12,100 x $82 = $992,200

Quarter 3 –

Budgeted Sales = 14,800 x $82 = $1,213,600

Quarter 4 –

Budgeted sales = 18,800 x $82 = $1,541,600

Solution5:

Solution

Thome and Crede CPAs

Service revenue budget:

	Thome and Crede CPAs
	Service Revenue Budget
		Quarter 1				Quarter 2
Department	Billable Hours	Billable Rate	Total Revenue		Billable Hours	Billable Rate	Total Revenue
Auditing	2,500	$85	$212,500		1,700	$85	$144,500
Tax	3,320	$93	$308,760		2,650	$93	$246,450
Consulting	1,720	$103	$177,160		1,720	$103	$177,160
Total			$698,420				$568,110

	Thome and Crede CPAs
	Service Revenue Budget
		Quarter 3				Quarter 4
Department	Billable Hours	Billable Rate	Total Revenue		Billable Hours	Billable Rate	Total Revenue
Auditing	2,330	$85	$198,050		2,500	$85	$212,500
Tax	2,240	$93	$208,320		2,720	$93	$252,960
Consulting	1,720	$103	$177,160		1,720	$103	$177,160
Total			$583,530				$642,620

Note: total revenue (for any department) = billable hours x billable rate

For instance, Auditing in Quarter1,

Billable hours = 2,500

Billable rate = $85

Total revenue = 2,500 x $85 = $212,500

Service Revenue Budget

Thome and Crede CPAs
Service Revenue Budget
For the Year Ended 2020
Department	Billable Hours	Billable Rate	Total Revenue
Auditing	9,030	$85	$767,550
Tax	10,930	$93	$1,016,490
Consulting	6,880	$103	$708,640
Total			$2,492,680

Note: total revenue for each department is computed as follows,

Total billable hours for each quarter x billable rate = total revenue

• Auditing

Billable hours = billable hours in Quarter 1+ quarter 2 + Quarter 3 + Quarter 4

= 2,500 + 1,700 + 2,330 + 2,500 = 9,030 hours

Billable rate = $85

Total revenue = $85 x 9,030 = $767,550

• Tax

Billable hours = 3,320 + 2,650 + 2,240 + 2,720 = 10,930

Billable rate = $93

Total revenue = $93 x 10,930 hours = $1,016,490

• Consulting

Billabe hours = 1,720 + 1,720 + 1,720 + 1,720 = 6,880

Billable rate = $103

Total revenue = $103 x 6,880 = $708,640