According to its original plan, Topeka Consulting Services Company plans to char

Question

According to its original plan, Topeka Consulting Services Company plans to charge its customers for service at $120 per hour in 2018. The company president expects consulting services provided to customers to reach 45,000 hours at that rate. The marketing manager, however, argues that actual results may range from 40,000 hours to 50,000 hours because of market uncertainty. Topeka's standard variable cost is $45 per hour, and its standard fixed cost is $1,350,000. Required Develop flexible budgets based on the assumptions of service levels at 40,000 hours, 45,000 hours, and 50,000 hours. Flexible Budget Flexible Budget Flexible Budget 40,000 Hours 45,000 Hours 50,000 Hours

Explanation / Answer

40000 45000 50000 Revenue 4800000 5400000 6000000 Variable costs 1800000 2025000 2250000 Contribution margin 3000000 3375000 3750000 Fixed costs 1350000 1350000 1350000 Net operating income 1650000 2025000 2400000

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