1. Participatory budgeting can sometimes lead to negative consequences. Identify three potential negative outcomes that can arise from participatory budgeting.
2. Kirk Co. CPA is preparing activity based budgets for 2011. The partners expect the firm to generate billable hours for the year as follows:
|
Data entry |
1,100 hours |
|
Auditing |
2,400 hours |
|
Tax |
2,150 hours |
|
Consulting |
375 hours |
The company pays $8 per hour to data entry clerks, $40 per hour to audit personnel, $50 per hour to tax personnel, and $50 per hour to consulting personnel. Prepare a schedule of budgeted labor costs for 2011 using activity based budgeting.