Question: According to its <a href=original plan, Bailey Consulting Services Company plans to charge its customers …” />

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Show transcribed image text According to its original plan, Bailey Consulting Services Company plans to charge its customers for service at $129 per hour in 2014. The company president expects consulting services provided to customers to reach 48,000 hours at that rate. The marketing manager, however, argues that actual results may range from 44,000 hours to 52,000 hours because of market uncertainty. Bailey's standard variable cost is $39 per hour, and its standard fixed cost is $1, 400,000. Prepare flexible budgets based on the assumptions of service levels at 44,000 hours, 48,000 hours, and 52,000 hours.

According to its original plan, Bailey Consulting Services Company plans to charge its customers for service at $129 per hour in 2014. The company president expects consulting services provided to customers to reach 48,000 hours at that rate. The marketing manager, however, argues that actual results may range from 44,000 hours to 52,000 hours because of market uncertainty. Bailey's standard variable cost is $39 per hour, and its standard fixed cost is $1, 400,000. Prepare flexible budgets based on the assumptions of service levels at 44,000 hours, 48,000 hours, and 52,000 hours.

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