Question

Using the data provided in the ‘Data Task B’ worksheet, complete the flexible budget for T&K Solutions and calculate flexible budget variances using the proforma in ‘Schedule 2’. For each variance, indicate if it is U (unfavourable), F (favourable)

2018 BUDGETED DATA	Taxation	Bookkeeping	Advisory	Total
Billable hours	4400	1200	5200	10800
Professional labour hours	4600	1320	5720	11640
Charge out rate per billable hour	$                     210.00	$                     180.00	$                     210.00
Professional labour per worked hour	$                      90.00	$                      75.00	$                      90.00
Variable overhead				$                   145,000	Note 1
Fixed overhead				$                   610,000	Note 2
2018 ACTUAL COSTS	Taxation	Bookkeeping	Advisory	Total
Billable hours	4200	1400	5900	11500
Professional labour hours	4400	1500	6400	12300
Charge out rate per billable hour	$                     210.00	$                     185.00	$                     210.00
Professional salary paid	$                   386,000	$                   112,500	$                   586,000
Actual variable overhead paid				$                   162,000	Note 1
Actual fixed overheads paid				$                   597,000	Note 2
Note 1: Variable overhead varies with the billable hours
Note 2: The partners have decided a fair allocation of fixed overheads is as a percentage of floor space.
	Taxation	Bookkeeping	Advisory	Total
Floor Space by service	130	55	195	380	sqm

TASK B SCHEDULE 2:	Prepare the Flexible Budgets for each service department for the year 2018
Allocation of variable overhead:	Budgeted	Actual
Variable overhead rate:			per billable hour
TAXATION
Billable hours	Actual	Flexible budget variance	U/F	Flexible Budget	Volume   variance	U/F	Static Budget
	4,200	-	-	4,200	200	U	4,400
Revenue
Professional salaries
Variable overhead
Fixed overheads
Profit / Loss
BOOKKEEPING
Billable hours	Actual	Flexible budget variance	U/F	Flexible Budget	Volume   variance	U/F	Static Budget
Revenue
Professional salaries
Variable overhead
Fixed Overhead
Profit / Loss
ADVISORY
Billable hours	Actual	Flexible budget variance	U/F	Flexible Budget	Volume   variance	U/F	Static Budget
Revenue
Professional salaries
Variable overhead
Fixed Overhead
Profit / Loss

pleases show me how to calculate and formula

Answer 1

TASK B SCHEDULE 2:	Prepare the Flexible Budgets for each service department for the year 2018
Allocation of variable overhead:	Budgeted	Actual
Variable overhead rate:	145000/10800 = 13.426	162000/11500 = 14.087	per billable hour
TAXATION
Billable hours	Actual	Flexible budget variance	U/F	Flexible Budget	Volume   variance	U/F	Static Budget
	4,200	-	-	4,200.00	200	U	4,400
Revenue	4200*210 = 882000	0		4200*210 = 882000
Professional salaries	386000	-8000	U	4200*90 = 378000
Variable overhead	4200*14.087 = 59165	-2776.2	U	4200*13.426 = 56389
Fixed overheads	597000*130/380 = 204236.8	4447.368	F	610000*130/380 = 440555.600
Profit / Loss	232597.8	6328.832	U	238926.589
Following 2 calculations will also be done same as above.
BOOKKEEPING
Billable hours	Actual	Flexible budget variance	U/F	Flexible Budget	Volume   variance	U/F	Static Budget
Revenue	259000	-7000	F	252000
Professional salaries	112500	-13500	U	99000
Variable overhead	196120.4	-177324.1	U	18796.2963
Fixed Overhead	86407.89474	1881.579	F	88289.4737
Profit / Loss	-136028.295	181942.5	U	45914.23
ADVISORY
Billable hours	Actual	Flexible budget variance	U/F	Flexible Budget	Volume   variance	U/F	Static Budget
Revenue	1239000	0		1239000
Professional salaries	586000	-71200	U	514800
Variable overhead	83113.04348	-3900.081	U	79212.963
Fixed Overhead	306355.2632	6671.053	F	313026.316
Profit / Loss	263531.6934	68429.03	U	331960.721