Mike Tackett, manager of the Troopers Café, has asked for your assistance preparing the monthly budget for January 20X8. He provides you with the prior January actuals as follows: Sales $100.400 Expenses: Labor (F) 12,000 Labor (V) 18,000 Cost of sales (V) 36,000 Supplies (V) 3.200 Energy (V) 2.620 Promotion (V) 1.300 Maintenance (F) 2.000 Maintenance (V) 1.200 Property taxes (F) 800 Depreciation (F) 1.000 Rent (F) 850 Insurance (F) 625 Subtotal 79.595 Net income $20.805 Assume for 20X8 sales are expected to increase by 10 percent, fixed costs will increase by 5 percent, and variable costs will remain at the same percentage of sales as experienced in the prior January. Prepare the budget for January 20X8. HOMEWORK HINT: Divide the prior January variable expenses by the prior January sales amount to come up with the percentage of sales for each variable expense. DO NOT ROUND THE PERCENTAGEI Multiply that percentage by the January 2018 Budgeted Sales Amount (that you figure out) to come up with the January 2018 Budgeted Variable Expense Amount.
Mike Tackett, manager of the Troopers Café, has asked for your assistance preparing the monthly budget for January 20X8. He provides you with the prior January actuals as follows: Sales $100.400 Expenses: Labor (F) 12,000 Labor (V) 18,000 Cost of sales (V) 36,000 Supplies (V) 3.200 Energy (V) 2.620 Promotion (V) 1.300 Maintenance (F) 2.000 Maintenance (V) 1.200 Property taxes (F) 800 Depreciation (F) 1.000 Rent (F) 850 Insurance (F) 625 Subtotal 79.595 Net income $20.805 Assume for 20X8 sales are expected to increase by 10 percent, fixed costs will increase by 5 percent, and variable costs will remain at the same percentage of sales as experienced in the prior January. Prepare the budget for January 20X8. HOMEWORK HINT: Divide the prior January variable expenses by the prior January sales amount to come up with the percentage of sales for each variable expense. DO NOT ROUND THE PERCENTAGEI Multiply that percentage by the January 2018 Budgeted Sales Amount (that you figure out) to come up with the January 2018 Budgeted Variable Expense Amount.
Chapter7: Budgeting
Section: Chapter Questions
Problem 1PB: Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and...
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