ounting to 30 percent of the annual salaries. employee fringe However, the improvement of some corporate-wide employee programs will increase the fringe benefits to 40 percent. The original plan assumes a fixed hourly rate for travel and other related expenses for each billing hour of Design. These are expenses that are not reimbursed by the client, and the previously determined hourly rate has proven to be adequate to cover these costs. Other revenue is derived from temporary rentals and interest income and remains unchanged for the fourth quarter. General and administrative expenses have been favourable at 7 percent below the plan; this 7 percent savings on fourth quarter expenses will be reflected in the revised plan. Depreciation of office equipment and personal computers will stay constant at the projected straight-line rate. Due to the favourable experience for the first three quarters and the division's increased ability to absorb costs, the corporate management at Rocky Mountain Services has increased the corporate expense allocation by 50 percent. 2 gi 0 e O Coorch for anything Required a. Prepare a revised operating budget for the fourth quarter for Denver Design Associates that David Miller will present to corporate management. b. What would be the consequences if an organization would carry on with an unrevised operating budget? c. Who is responsible for preparation of the operating budget appropriately? d. Is there any ethical issues to take into consideration? 100% a ounting to 30 percent of the annual salaries. employee fringe However, the improvement of some corporate-wide employee programs will increase the fringe benefits to 40 percent. The original plan assumes a fixed hourly rate for travel and other related expenses for each billing hour of Design. These are expenses that are not reimbursed by the client, and the previously determined hourly rate has proven to be adequate to cover these costs. Other revenue is derived from temporary rentals and interest income and remains unchanged for the fourth quarter. General and administrative expenses have been favourable at 7 percent below the plan; this 7 percent savings on fourth quarter expenses will be reflected in the revised plan. Depreciation of office equipment and personal computers will stay constant at the projected straight-line rate. Due to the favourable experience for the first three quarters and the division's increased ability to absorb costs, the corporate management at Rocky Mountain Services has increased the corporate expense allocation by 50 percent. 2 gi 0 e O Coorch for anything Required a. Prepare a revised operating budget for the fourth quarter for Denver Design Associates that David Miller will present to corporate management. b. What would be the consequences if an organization would carry on with an unrevised operating budget? c. Who is responsible for preparation of the operating budget appropriately? d. Is there any ethical issues to take into consideration? 100% a