Gump Painting Service has budgeted the following time and material for 2016: BUDGETED COSTS FOR 2016 Time Material Charges Charges Painters’ wages and benefits $ 36,000 Service manager’s salary and benefits $23,000 Office employee’s salary and benefits 12,000 3,000 Cost of paint 50,000 Overhead (supplies, utilities, etc.) 16,000 8,500 Total budgeted costs $64,000 $84,500 Gump budgets 4,000 hours of paint time in 2016 and will charge a profit of $12 per hour, in addition to a 25% markup on the cost of paint. On February 15, 2016, Gump is asked to prepare a price estimate to paint a building. Gump estimates that this job will take 12 labor hours and $500 in paint. Instructions Compute the labor rate for 2016. Compute the material loading charge rate for 2016. Prepare a time-and-material price estimate for painting the building.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Gump Painting Service has budgeted the following time and material for 2016:
BUDGETED COSTS FOR 2016
|
|
Time |
Material |
|
|
Charges |
Charges |
|
Painters’ wages and benefits |
$ 36,000 |
|
|
|
|
$23,000 |
|
Office employee’s salary and benefits |
12,000 |
3,000 |
|
Cost of paint |
|
50,000 |
|
|
16,000 |
8,500 |
|
Total budgeted costs |
$64,000 |
$84,500 |
Gump budgets 4,000 hours of paint time in 2016 and will charge a profit of $12 per hour, in addition to a 25% markup on the cost of paint.
On February 15, 2016, Gump is asked to prepare a price estimate to paint a building. Gump estimates that this job will take 12 labor hours and $500 in paint.
Instructions
- Compute the labor rate for 2016.
- Compute the material loading charge rate for 2016.
- Prepare a time-and-material price estimate for painting the building.
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