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Exercise 8-6A (Algo) Using a flexible budget to accommodate market uncertainty LO 8-4 According to its original plan, Thornton Consulting Services Company plans to
Exercise 8-6A (Algo) Using a flexible budget to accommodate market uncertainty LO 8-4 According to its original plan, Thornton Consulting Services Company plans to charge its customers for service at $135 per hour in Year 2. The company president expects consulting services provided to customers to reach 48,000 hours at that rate. The marketing manager, however, argues that actual results may range from 42,000 hours to 54,000 hours because of market uncertainty. Thornton's standard variable cost is $40 per hour, and its standard fixed cost is $1,450,000. Required Develop flexible budgets based on the assumptions of service levels at 42,000 hours, 48.000 hours, and 54,000 hours. Flexible Budget Flexible Budget 42,000 Hours Flexible Budget 48,000 Hours 54,000 Hours O 0 3 S 0
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