Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Chapter 9, Problem 6P
Determine the annual budget for office utilities using the data from the past 12 months shown in Figure 9-7. Utility costs are expected to increase by 8% per year due to inflation. None of the company’s goals are expected to affect the utility costs.
Figure 9-7 Utility Costs
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Students have asked these similar questions
Prepare a budgeted income statement
using the information shown.
Sales (units)
Sales price per unit
Uncollectible expense
Direct material per unit
Direct labor per unit (hours)
Direct labor rate per hour
Manufacturing overhead
Variable sales and administration expenses per unit
Fixed sales and administration expenses
15,000
2$
40
1%*
2$
0.5
$
$15,000
$ 2
$20,000
15%**
20
Таxes
*of sales
**of income before taxes
Wayne Mueller, financial analyst at CELL Corporation, is examining the behav-
ior of quarterly utility costs for budgeting purposes. Mueller collects the following data on machine-hours
worked and utility costs for the past 8 quarters:
Utility Costs
$215,000
Quarter
Machine-Hours
120,000
150,000
200,000
270,000
170,000
250,000
225,000
195,000
2
75,000
110,000
150,000
90,000
140,000
130,000
3
4
5
100,000
1. Estimate the cost function for the quarterly data using the high-low method.
2. Plot and comment on the estimated cost function.
3. Mueller anticipates that CELL will operate machines for 125,000 hours in quarter 9. Calculate the pre-
dicted utility costs in quarter 9 using the cost function estimated in requirement 1.
please explain step-by-step how to calculate an operational budget with the information provided:
The time window would be in a year of operation
total expenses for the year would be $22,298.57
projected income for the year would be $64,000
Chapter 9 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 9 - What is general overhead?Ch. 9 - What are the two types of general overhead budgets...Ch. 9 - You are preparing a general overhead budget to be...Ch. 9 - Why must meals and entertainment be kept separate...Ch. 9 - Why are fixed costs fixed only over a specified...Ch. 9 - Determine the annual budget for office utilities...Ch. 9 - Determine the annual budget for office utilities...Ch. 9 - Prob. 8PCh. 9 - Prob. 9P
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