Question

Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2017). 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
Auditing 2,300 1,600 2,000 2,400
Tax 3,000 2,200 2,000 2,500
Consulting 1,500 1,500 1,500 1,500

Average hourly billing rates are auditing $80, tax $90, and consulting $110.

What is the total budgeted billable hours for Thome and Crede, CPAs, for the year 2020 across all three departments?
a) 10,000 billable hours
b) 19,300 billable hours
c) 7,800 billable hours
d) 13,300 billable hours

Answer 1

To find the total budgeted billable hours, we sum the hours for each department across all four quarters: Auditing has 8,300 hours, Tax has 9,700 hours, and Consulting has 6,000 hours, totaling 24,000 hours. However, this does not match any of the provided options, implying there may be an error.

Step-by-step explanation:

To calculate the total budgeted billable hours for Thome and Crede, CPAs, for the year 2017 across all three departments, we need to add up the billable hours for each department for each quarter. This is essentially a matter of performing a straightforward summation of the provided billable hours.

• Auditing: 2,300 + 1,600 + 2,000 + 2,400 = 8,300 hours
• Tax: 3,000 + 2,200 + 2,000 + 2,500 = 9,700 hours
• Consulting: 1,500 + 1,500 + 1,500 + 1,500 = 6,000 hours

Adding these up gives us the total:

8,300 hours (Auditing) + 9,700 hours (Tax) + 6,000 hours (Consulting) = 24,000 hours.

However, the options provided do not include 24,000 hours, indicating a potential issue with the options or a typo in the question.