Ever Clean Company provides gutter cleaning services to residential clients. The company has enjoyed considerable growth in recent years due to a successful marketing cam- paign and favorable reviews on service-rating Web sites. Ever Clean owner Joanne Clark makes sales calls herself and quotes on jobs based on length of gutter surface. Ever Clean hires college students to drive the company vans to jobs and clean the gutters. A part-time bookkeeper takes care of billing customers and other office tasks. Overhead is allocated based on direct labor-hours (DLH). Joanne Clark estimates that her gutter cleaners will work a total of 1,000 jobs during the year. Each job averages 600 feet of gutter surface and requires 12 direct labor-hours. Clark pays her gutter cleaners $15 per hour, inclusive of taxes and benefits. The following table presents the budgeted overhead costs for 2018: Variable costs $ 78,000 Supplies ($6.50 per DLH) Fixed costs (to support capacity of 12,000 DLH) 25,000 Indirect labor Depreciation 17,000 Other 24,000 Total budgeted costs $144,000
Ever Clean Company provides gutter cleaning services to residential clients. The company has enjoyed considerable growth in recent years due to a successful marketing cam- paign and favorable reviews on service-rating Web sites. Ever Clean owner Joanne Clark makes sales calls herself and quotes on jobs based on length of gutter surface. Ever Clean hires college students to drive the company vans to jobs and clean the gutters. A part-time bookkeeper takes care of billing customers and other office tasks. Overhead is allocated based on direct labor-hours (DLH). Joanne Clark estimates that her gutter cleaners will work a total of 1,000 jobs during the year. Each job averages 600 feet of gutter surface and requires 12 direct labor-hours. Clark pays her gutter cleaners $15 per hour, inclusive of taxes and benefits. The following table presents the budgeted overhead costs for 2018: Variable costs $ 78,000 Supplies ($6.50 per DLH) Fixed costs (to support capacity of 12,000 DLH) 25,000 Indirect labor Depreciation 17,000 Other 24,000 Total budgeted costs $144,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Q.Calculate the budgeted
Transcribed Image Text:Ever Clean Company provides gutter cleaning services to residential
clients. The company has enjoyed considerable growth in recent years due to a successful marketing cam-
paign and favorable reviews on service-rating Web sites. Ever Clean owner Joanne Clark makes sales calls
herself and quotes on jobs based on length of gutter surface. Ever Clean hires college students to drive the
company vans to jobs and clean the gutters. A part-time bookkeeper takes care of billing customers and
other office tasks. Overhead is allocated based on direct labor-hours (DLH).
Joanne Clark estimates that her gutter cleaners will work a total of 1,000 jobs during the year. Each job
averages 600 feet of gutter surface and requires 12 direct labor-hours. Clark pays her gutter cleaners $15
per hour, inclusive of taxes and benefits. The following table presents the budgeted overhead costs for 2018:
Variable costs
$ 78,000
Supplies ($6.50 per DLH)
Fixed costs (to support capacity of 12,000 DLH)
25,000
Indirect labor
Depreciation
17,000
Other
24,000
Total budgeted costs
$144,000
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