Question

Novak, CPAs, are preparing their service revenue (sales) budget for the coming year (2017). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,540 1,930 2,200 2,740
Tax 3,330 2,510 2,110 2,780
Consulting 1,730 1,730 1,730 1,730

Average hourly billing rates are auditing $82, tax $93, and consulting $102.

Required:
Prepare the service revenue (sales) budget for 2017 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

Answer 1

Hours

Department Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year

Auditing 2,540 1,930 2,200 2,740 9,410

Tax 3,330 2,510 2,110 2,780 10,730

Consulting 1,730 1,730 1,730 1,730 6,920

Revenue

Department Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year

Auditing $208,280 $158,260 $180,400 $224,680 $771,620

Tax $309,690 $233,430 $196,230 $258,540 $997,890

Consulting $176,460 $176,460 $176,460 $176,460 $176,460

Total $694,430 $568,150 $553,090 $659,680 $1,945,970

Step-by-step explanation:

A sales budget is a forecast of future sales resulting from company`s activities.