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Hong Kong Health Consultants Company provided dietary service to clients by offering consultation with specialist staff.

The budgeting information for the year 2019 is as follows:

	Dietary	Company
Service fee charged to client	$750 per consultation
Cost of dietary material*	$60 per consultation
Fixed annual salary	$300,000 per consultant
Variable cost per enquiry#		$15 per enquiry
Commission to staff		$20 per consultation
Dietary fixed costs	$540,000 for a year
Other fixed corporate costs		$1,000,000 for a year

*Assume all client of dietary will be given a pack of dietary material each consultation. # All enquiries are handled by the companys trained staff who is paid $15 per enquiry.

Only a small portion of enquiry will turn up for a charged consultation.

Actual results for the year 2019 incorporate the following additional information:

1. The company offered 8% discount of service fee charged to all clients during 2019.

2. The cost of dietary materials increased to $65 per consultation.

3. The actual salary of full-time consultants was lowered than the budget because three experienced consultants had left the company since beginning of the year. Each full- time consultant is planned to consult 1,500 clients per year.

4. The company can take part-time consultants at a cost of $260 per consultation to handle increasing demand. A total of 4,950 consultations were carried out by the part- time consultants in 2019.

5. Dietary fixed costs were increased by $80,000 per year through the hire of equipment to provide additional service to clients free of charge.

6. The actual corporate costs increased because a new computer software has been installed to provide detailed health records and scheduling of all client. The operating cost is $50,000 per year.

Appendix

Statistics relating to the year of 2019 is provided below:

	Budget	Actual
Total client enquiries:
New clients	30,000	44,000
Repeat clients	20,000	16,000
Total	50,000	60,000
Number of charged consultations:
New clients	8,000	10,800
Repeat clients	10,000	9,000
Total	18,000	19,800
Number of consultants employed:	12	9
Number of client complaints:	180	495

Prepare income statements showing the financial results of 2019 in tabular format (i) Budgeted, (ii) Actual.

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