Question 5 Selcombe, Selcombe and Selcombe Media are three generations of the one family involved in providing public relations services for nearly 50 years. The firm is preparing its fees budget for the year ending 30 June 2020. It budgets on a quarterly basis in a manner similar to figure 23.5. Craig Selcombe is the most senior member of the family and estimates that he will bill clients for 40 hours per week and have 2 weeks annual leave during January. Alexander Selcombe is Craigs son and intends to take 4 weeks leave during June and to bill clients for 38 hours per week. Craigs grandson, Samuel, is new to the firm and enjoys fishing on Friday afternoons and so usually bills clients for only 36 hours per week. Samuel intends to take 2 weeks leave beginning in July.

The charge-out rates per hour for each of the Selcombes are as follows.

Required Prepare the income budget for Selcombe, Selcombe and Selcombe Media for the year ending 30 June 2020, showing projected dollar service revenues by quarter as per the income statement. Assume there are 13 weeks in each of the four quarters of the year ending 30 June 2020.

SELCOMBE, SELCOMBE AND SELCOMBE Media Services Revenue Budget for the year ending 30 June 2020

Quarter Annual

Sept. Dec. Mar. June Total

Craig Selcombe

Budgeted chargeable hours 520 520 440 520 2 000

Budgeted charge rate 375 375 375 375 375

BUDGETED SERVICE FEES 195 000 195 000 165 000 195 000 750 000

Alexander Selcombe

Budgeted chargeable hours 494 494 494 342 1 824

Budgeted charge rate 285 285 285 285 285

BUDGETED SERVICE FEES 140 790 140 790 140 790 97 470 519 840

Samuel Selcombe

Budgeted chargeable hours 396 468 468 468 1 800

Budgeted charge rate 185 185 185 185 185

BUDGETED SERVICE FEES 73 260 86 580 86 580 86 580 333 000

TOTAL SERVICE REVENUE 409 050 422 370 392 370 379 050 1 602 840