Garcia and buffet a local cpa firm has budgeted 100000 in

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Garcia and Buffet, a local CPA firm, has budgeted $100,000 in fixed expenses per month for the tax department. It has also budgeted variable costs of $5 per tax return prepared for supplies, $35 per return for labor, and $10 per return for computer time.

The firm expects revenue from tax return preparation to be $300,000, based on 2,000 tax returns at $150 each. During the current month, 1,850 tax returns were actually prepared, at an average fee of $147 each. Actual variable costs were $9,100 for supplies, $65,000 for labor, and $18,000 for computer time. Actual fixed costs were $100,000.

Required

a) Prepare a flexible budget for the tax department of Garcia and Buffet for the current month.

b) Refer to the information above. Compute the flexible budget varaiance for Garcia and Buffet.

Reference no: EM13566685

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