Prepare a budgeted income statement for September. Service costs$ 24,00022,00042,000Variable costsMaintenance and repairDepreciation (fixed)Total$ 88,000Marketing and administrative costsMarketing (variable)Administrative (fixed)$ 14,50055,000$ 69,500TotalTotal costa$157,500Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative cosincrease by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent incrSeptember.Required:Prepare a budgeted income statement for September. (Do not round intermediate calculations.)VARMIT-B-GONEBudgeted Income StatementFor the Month of SeptemberService costs:Total service costsMarketing and administrative:Total marketing and administrative costsTotal costs Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls atleast once a month to all homes that subscribe to Its service. It makes more frequent calls during the summer. The number ofsubscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the monthsof interest follow:Service calls(per subacriber)0.60.9SubacribersMarch600AprilMay7001,4001.52.51,6001,6001,500June3.0JulyAugust2.4The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible.Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number ofservice calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred inAugust. All costs except depreciation are paid in cash.Service costsVariable costsMaintenance and repairDepreciation (fixed)$ 24,00022,00042,000S 88,000TotalMarketing and administrative costsMarketing (variable)Administrative (fixed)S 14,50055,000$ 69,500TotalTotal coats$157,500Variable service and marketing costs change with volume. Fixed depreciation wil remain the same, but fixed administrative costs willincrease by 5 percent beginning September 1. Maintenance anc repair are provided by contract, which calls for a 1 percent increase inSeptember.Required:Prepare a budgeted income statement for September. (Do not round intermediate calculations.)

Working Notes: 1. Revenue of September: = Subscribers for the month of august * (100% - % of fall) *…

Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to Its service. It makes more frequent calls during the summer. The number of subscribers also varles with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: Subecribers 600 700 1,400 1,600 1,600 1,500 Service calla (per wubacriber) 0.6 0.9 1.5 2.5 3.0 2.4 March April May June July Auguat The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible. Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of service calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred in August. All costs except depreciation are paid in cash. Service costs Variable costs aintenance and repair Depreciation (fixed) Total $24,000 22,000 42,000 S8,000 Marketing and administrative costa Marketing (variable) Administrative (fixed) $ 14,500 55,000 S 69,500 Total 7otal coats $157,500 Variable service and marketing costs change with volume. Fixed depreciation wil remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increese in September

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter8: Time Series Analysis And_forecasting

Section: Chapter Questions

Problem 27P: Hogs & Dawgs is an ice cream parlor on the border of north-central Louisiana and southern Arkansas...