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Question - Using a flexible budget to accommodate market uncertainty - According to its original plan, Benson Consulting Services Company plans to charge its customers for service at $133 per hour. The company president expects consulting services provided to customers to reach 47,000 hours at that rate. The marketing manager, however, argues that actual results may range from 42,000 hours to 52,000 hours because of market uncertainty. Benson's standard variable cost is $46 per hour, and its standard fixed cost is $1,370,000.
Required - Develop flexible budgets based on the assumptions of service levels at 42,000 hours, 47,000 hours, and 52,000 hours.
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