Urgent

Law Services Inc. provides a variety of legal services to its clients. The firm's attorneys each have the authority to negotiate billing rates with their clients. Law Services wants to manage its operations more effectively, and established a budget at the beginning of last year. The budget included total hours billed, amount billed per hour, and variable expense per hour. Unfortunately, the firm failed to meet its budgeted goals for last year. The results are shown below. Actual Budget 5,700 6,000 Total hours billed Amount billed/hour $275 $325 The budgeted variable expense per hour is $50, and the actual total variable expense was $285,000. There is disagreement among the attorneys over the reasons that the firm failed to meet its budgeted goals. Instructions: 1) Identify and explain three benefits of using Flexible budgets 2) Prepare the company's flexible budget through operating income at the $55,000,000 sales level 3) Identify and explain 3 possible reasons behind the decline in the company's operating income while sales increased. 4) Define budgetary slack. 5) Identify and explain two negative affects that budgetary slack can have on the budgeting process. Law Services Inc. provides a variety of legal services to its clients. The firm's attorneys each have the authority to negotiate billing rates with their clients. Law Services wants to manage its operations more effectively, and established a budget at the beginning of last year. The budget included total hours billed, amount billed per hour, and variable expense per hour. Unfortunately, the firm failed to meet its budgeted goals for last year. The results are shown below. Actual Budget 5,700 6,000 Total hours billed Amount billed/hour $275 $325 The budgeted variable expense per hour is $50, and the actual total variable expense was $285,000. There is disagreement among the attorneys over the reasons that the firm failed to meet its budgeted goals. Instructions: 1) Identify and explain three benefits of using Flexible budgets 2) Prepare the company's flexible budget through operating income at the $55,000,000 sales level 3) Identify and explain 3 possible reasons behind the decline in the company's operating income while sales increased. 4) Define budgetary slack. 5) Identify and explain two negative affects that budgetary slack can have on the budgeting process