Lambie Custodial Services (LCS) offers residential and commercial janitorial services. Clients are billed monthly but can cancel the service at the end of any month. In addition to the employees who do the actual cleaning, the firm employs two managers who handle the administrative tasks (human resources, accounting, and so on) and one dispatcher, who assigns the cleaning employees to jobs on a daily basis. On average, residential clients pay $600 per month for weekly cleaning services and the commercial clients pay $2,600 per month for daily service (weekdays only). A typical residential client requires 15 hours a month for cleaning and a typical commercial client requires 69 hours a month. In September, LCS had 75 commercial clients and 80 residential clients. Cleaners are paid $20 per hour and are only paid for the hours actually worked. Supplies and other variable costs are estimated to cost $10 per hour of cleaning. Other monthly costs (all fixed) are $29,000 selling, general, and administrative, including managerial and dispatcher salaries, and $5,200 in other expenses. With the changing economic conditions, the customer mix at LCS is expected to change to one with more residential and fewer commercial clients. Already, for October, company managers forecast a 10 percent increase in residential clients and a 20 percent decrease in commercial clients. Required: Prepare a budgeted income statement for Lambie Custodial Services for October.
Lambie Custodial Services (LCS) offers residential and commercial janitorial services. Clients are billed monthly but can cancel the service at the end of any month. In addition to the employees who do the actual cleaning, the firm employs two managers who handle the administrative tasks (human resources, accounting, and so on) and one dispatcher, who assigns the cleaning employees to jobs on a daily basis. On average, residential clients pay $600 per month for weekly cleaning services and the commercial clients pay $2,600 per month for daily service (weekdays only). A typical residential client requires 15 hours a month for cleaning and a typical commercial client requires 69 hours a month. In September, LCS had 75 commercial clients and 80 residential clients. Cleaners are paid $20 per hour and are only paid for the hours actually worked. Supplies and other variable costs are estimated to cost $10 per hour of cleaning. Other monthly costs (all fixed) are $29,000 selling, general, and administrative, including managerial and dispatcher salaries, and $5,200 in other expenses. With the changing economic conditions, the customer mix at LCS is expected to change to one with more residential and fewer commercial clients. Already, for October, company managers forecast a 10 percent increase in residential clients and a 20 percent decrease in commercial clients. Required: Prepare a budgeted income statement for Lambie Custodial Services for October.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Lambie Custodial Services (LCS) offers residential and commercial janitorial services. Clients are billed monthly but can cancel the
service at the end of any month. In addition to the employees who do the actual cleaning, the firm employs two managers who handle
the administrative tasks (human resources, accounting, and so on) and one dispatcher, who assigns the cleaning employees to jobs on
a daily basis.
On average, residential clients pay $600 per month for weekly cleaning services and the commercial clients pay $2,600 per month for
daily service (weekdays only). A typical residential client requires 15 hours a month for cleaning and a typical commercial client
requires 69 hours a month. In September, LCS had 75 commercial clients and 80 residential clients. Cleaners are paid $20 per hour
and are only paid for the hours actually worked. Supplies and other variable costs are estimated to cost $10 per hour of cleaning.
Other monthly costs (all fixed) are $29,000 selling, general, and administrative, including managerial and dispatcher salaries, and
$5,200 in other expenses.
With the changing economic conditions, the customer mix at LCS is expected to change to one with more residential and fewer
commercial clients. Already, for October, company managers forecast a 10 percent increase in residential clients and a 20 percent
decrease in commercial clients.
Required:
Prepare a budgeted income statement for Lambie Custodial Services for October.
Transcribed Image Text:Required:
Prepare a budgeted income statement for Lambie Custodial Services for October.
Revenues:
Commercial
Residential
Total revenue
Expenses:
Lambie Custodial Services
Budgeted Income Statement
For the Month of October
Cleaner compensation
Supplies
Selling, general, and administrative
Other expenses
Total expenses
Income
$
$
0
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education