Tallon & Associates Is a Consulting Firm Specializing in Business

question 43

Essay

Tallon & Associates is a consulting firm specializing in business location studies. The results for last year, along with the budget, are as follows: $\begin{array}{lcc}& \text {Actual }& \text {Budget}\\ \text { Billable hours } & \underline{25,200} &\underline{ 24,000} \\ \text { Revenue } & \$ 2,772,000 & \$ 2,400,000 \\ \text { Professional salaries (variable) } & 1,310,000 & 1,200,000 \\ \text { Other variable costs } & 488,000 & 400,000 \\ \text { Fixed costs } & 492,000 & 450,000 \\ \text { Office management salaries (fixed) } & \underline{317,000} & \underline{225,000 }\\ \text { Operating profit } & \underline{\$165,000 }& \underline{\$125,000} \\\end{array}$

Required:
(Be sure to indicate whether the variance is favorable or unfavorable.)
a. Prepare a flexible budget using billable hours as the measure of output.
b. Prepare a sales activity variance analysis.
c. Compute the sales price variance.

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Definitions:

Metacognition

The awareness and understanding of one's own thought processes, often referred to as "thinking about thinking."

Abstract Thinking

The ability to think about objects, principles, and ideas that are not physically present.

Symbolic Thinking

The ability to use symbols, images, or objects to represent something that is not physically present, commonly seen in language, mathematics, and art.

Logical Thinking

The process of reasoning consistently and systematically to come to a conclusion.