E9-3 Roche and Young, CPAs, are preparing their service revenue (sales) budget f

Question

E9-3
Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,200 1,600 2,000 2,400
Tax 3,000 2,400 2,000 2,500
Consulting 1,500 1,500 1,500 1,500

Average hourly billing rates are: auditing $80, tax $90, and consulting $100.

Prepare the service revenue (sales) budget for 2008 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

ROCHE AND YOUNG, CPA's
Sales Revenue Budget

For the Year Ending December 31, 2008


Quarter 1
Dept Billable Hours Billable Rate Total Rev.
Auditing $ $
Tax
Consulting



Totals

$



Quarter 2
Auditing $ $
Tax
Consulting



Totals

$



Quarter 3
Auditing $ $
Tax
Consulting



Totals

$



Quarter 4
Auditing $ $
Tax
Consulting



Totals

$



Totals
Auditing $ $
Tax
Consulting



Totals

$

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Explanation / Answer

Billable hours Billable Rate Total revenue Quarter 1 Audting 2200 $80 $176,000 Tax $3,000 $90 $270,000 Consultancy 1500 $100 $150,000 Total revenue $596,000 Quarter 2 Audting 1600 $80 $128,000 Tax 2400 $90 $216,000 Consultancy 1500 $100 $150,000 Total revenue $494,000 Quarter 3 Audting 2000 $80 $160,000 Tax 2000 $90 $180,000 Consultancy 1500 $100 $150,000 Total revenue $490,000 Quarter 4 Audting 2400 $80 $192,000 Tax 2500 $90 $225,000 Consultancy 1500 $100 $150,000 Total revenue $567,000 Total revenue Auditing Tax Consulting Total 1 quarter $176,000 $270,000 $150,000 $596,000 2 quarter $128,000 $216,000 $150,000 $494,000 3 quarter $160,000 $180,000 $150,000 $490,000 4 quarter $192,000 $225,000 $150,000 $567,000 Total revenue for the year 2008 $656,000 $891,000 $600,000 $2,147,000

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