Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2020). 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 Auditing2,5401,9302,2002,740 Tax3,3302,5102,1102,780 Consulting1,7301,7301,7301,730 Average hourly billing rates are auditing $83, tax $95, and consulting $103. Prepare the service revenue (sales) budget for 2020 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

Answer and Explanation:

The presentation of the service revenue or sales budget is presented below:

According to the scenario, the preparation are as follow:-

                                          Service Revenue Budget

               Quarter 1                                                      Quarter 2

                        a                      b                     a × b                         a                      b                     a × b

Particular  Billable HrsBillable RateTotal Revenue ($)Billable HrsBillable RateTotal Revenue ($)

Auditing           2,540              $83         $210,820            1,930

$83                 $160,190

Tax                   3,330              $95          $316,350             2,510

$95                 $238,450

Consulting  1,730              $103          $178,190               1,730

$103         $178,190

Total amount                                      $705,360  

                      $576,830

We simply multiplied the billable hours with the billable rate so that the total revenue could come for both quarters

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