Bk consulting is a management consulting firm other than

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BK Consulting is a management consulting firm. Other than the senior leadership (who manage the firm, but do not actively consult), the managers and staff are billed to clients on an hourly basis. The workload varies quite a bit from month to month requiring careful planning.

Managers are billed to clients at a rate of $800 per hour and staff at a rate of $400 per hour. Managers are paid $200 per hour worked (including nonbillable time) and staff are paid $100 per hour. The current plan calls for managers to bill 800 hours in May and 500 hours in June. Staff are expected to bill 4,800 hours in May and 3,000 hours in June. Managers will work a total of 1,600 hours in both months and staff will work a total of 6,400 hours in both months.

Other monthly costs (all fixed) are $500,000 SG&A, $200,000 in depreciation, and $300,000 in marketing.

Required

Prepare a budgeted income statement for BK Consulting for May and June (separately).

Reference no: EM13567969

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