K&B is a small management consulting firm. Last month, the firm billed fewer hours than expected, and, as expected, profits were lower than anticipated.

Reported Income Statement Master Budget

Billable hours^a 7,220 9,100

Revenue $ 672,000 $ 812,000

Professional salaries (all variable) 341,000 401,000

Other variable costs (e.g., supplies, computer services) 98,200 120,200

Fixed costs 205,400 200,400

Profit $ 27,400 $ 90,400

^aThese are hours billed to clients. They are fewer than the number of hours worked because there is nonbillable time (e.g., slack periods, time in training sessions) and because some time worked for clients is not charged to them.

Required:

Prepare a flexible budget for K&B. Use billable hours as the measure of output (that is, units produced).(Do not roundintermediate calculations.)

**SEE ATTACHMENT**

K&B is a small management consulting firm. Last month, the firm billed fewer hours than expected, and, as expected, profits were lower than anticipated. Billable hours Revenue Professional salaries (all variable) a Reported Income Statement 7,220 $ 672,000 Other variable costs (e.g., supplies, computer services) Fixed costs Profit Master Budget 9,100 $ 812,000 341,000 401,000 98,200 120,200 205,400 $ 27,400 200,400 $ 90,400 These are hours billed to clients. They are fewer than the number of hours worked because there is nonbillable time (e.g., slack periods, time in training sessions) and because some time worked for clients is not charged to them. Required: Prepare a flexible budget for K&B. Use billable hours as the measure of output (that is, units produced). (Do not round intermediate calculatons.) Flexible Budget Revenue Costs: Professional Salaries Other Variable Costs Fixed Costs Total Costs Profit/(Loss) a than expected, and, as Master Budget because there is me worked for clients is, units produced)