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According to its original plan, Katta Consulting Services Company would charge its customers for service at $200 per hour in 2006. The company president expects consulting services provided to customers to reach 40,000 hours at that rate. The marketing manager, however, argues that actual results may range from 35,000 hours to 45,000 hours because of market uncertainty. Katta's standard variable cost is $90 per hour, and its standard fixed cost is $3,000,000.

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Develop flexible budgets based on the assumptions of service levels at 35,000 hours, 40,000 hours, and 45,000 hours.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9441790

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