Galler Tax Services specializes in preparing individual tax returns. Revenue is earned from completed returns for all clients. Direct labour for part-time preparers is the primary cost of the company, Roy Galler, the owner, has received the following performance report for the current year: 1 3 4 Galler Tax Services Performance Report For the Year Ended June 30, 2021 Actual 500 5101,910 Budget 540 $109,350 Variances 40U $7,4400 5 6 7 Number of returns 9 Service fees 10 Variable costs: Direct labour 12 Supplies Utilities 14 Training 15 Overhead 16 Total variable costs 17. Contribution mangin 18 Fixed overhead 19 Operating income (1053) 20 21 Required 54,820 1,830 4,750 4,090 32,550 98,040 3,870 3.100 $770 58,455 2,025 5,940 4,590 35,100 106,110 3.240 2,500 $740 3,635 F 195 F 1.190 F 500F 2.550 3.070 630 6000 $30 F Required: is the original performance report useful? Why or why not? (2 marks) Useful Reason 2. 2. Prepare a performance report using the flexible budget approach. (11 marks) Note: You may not need to use all the blue and green hightlighted cells. Per return Actual Budget Variances 38 Number of resales 39 Total selling fees 10 Variable cost Direct labour Supplies 43 Utilities Training Overhead 16 Total variable costs 47 Contribution margin Fixed overhead 19 Operating income (los) Based on the performance report in part 2, does Galler need to be concerned? Why or why not? (2 marks) Concerned 3 4 5 Reason Galler Tax Services specializes in preparing individual tax returns. Revenue is earned from completed returns for all clients. Direct labour for part-time preparers is the primary cost of the company, Roy Galler, the owner, has received the following performance report for the current year: 1 3 4 Galler Tax Services Performance Report For the Year Ended June 30, 2021 Actual 500 5101,910 Budget 540 $109,350 Variances 40U $7,4400 5 6 7 Number of returns 9 Service fees 10 Variable costs: Direct labour 12 Supplies Utilities 14 Training 15 Overhead 16 Total variable costs 17. Contribution mangin 18 Fixed overhead 19 Operating income (1053) 20 21 Required 54,820 1,830 4,750 4,090 32,550 98,040 3,870 3.100 $770 58,455 2,025 5,940 4,590 35,100 106,110 3.240 2,500 $740 3,635 F 195 F 1.190 F 500F 2.550 3.070 630 6000 $30 F Required: is the original performance report useful? Why or why not? (2 marks) Useful Reason 2. 2. Prepare a performance report using the flexible budget approach. (11 marks) Note: You may not need to use all the blue and green hightlighted cells. Per return Actual Budget Variances 38 Number of resales 39 Total selling fees 10 Variable cost Direct labour Supplies 43 Utilities Training Overhead 16 Total variable costs 47 Contribution margin Fixed overhead 19 Operating income (los) Based on the performance report in part 2, does Galler need to be concerned? Why or why not? (2 marks) Concerned 3 4 5 Reason
