25 Jan CNX Motors is preparing a sales budget for the cur
CNX Motors is preparing a sales budget for the current year for the service department that is based on last year’s actual amounts. Management is interested in understanding what might happen if the service department has an increase in sales volume (i.e., the number of mechanic hours) or an increase in the average revenue per mechanic hour. They believe it is unlikely that both would increase, due to economic conditions in the local market. Last year’s sales amounts were as follows: Required A. Compute the average revenue per mechanic hour for the current year based on last year’s actual data. You should round the average hourly rate to the nearest penny. B. Prepare a monthly sales budget for the current year, assuming that monthly sales volume (i.e., mechanic hours) will be 10 percent greater than in the same month last year. Assume that the average revenue per mechanic hour is the same as you computed in question A. You should round budgeted hours to one decimal and budgeted revenues to the nearest dollar. C. Prepare a monthly sales budget for the current year assuming that the average revenue per mechanic hour computed in question A increased by 5 percent. Assume that the number of mechanic hours stays the same as in the prior year. That is, there is no increase or decrease in the monthly sales volume. You should round the rate per mechanic hour to two decimals and budgeted revenues to the nearest dollar. D. For the current year in total, is it more advantageous
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