Tallon & Associates Is a Consulting Firm Specializing in Business

question 119

Essay

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