Prepare a spreadsheet of an overhead budget for the company in Problem 5 on page 216 of the textbook.
You have been running a construction company out of your home with your
spouse helping you keep the books. The company has grown and has begun
to take up too much of your and your spouseâ??s time. The decision has been
made to hire a part-time estimator to help you with the bidding and a full-
time office manager. The office managerâ??s duties will include accounting,
receptionist, and secretarial duties. By hiring the new personnel you will
need to move the companyâ??s operations out of your home and into an office.
Ck Num Date Payee Account Amount
4990 01/07/04 Gas Company Office Utilities 231.13
5004 01/21/04 Power Company Office Utilities 100.35
5029 02/06/04 Gas Company Office Utilities 291.01
5035 02/20/04 Power Company Office Utilities 99.56
5036 03/05/04 Gas Company Office Utilities 273.12
5047 03/19/04 Power Company Office Utilities 105.22
5073 04/02/04 Gas Company Office Utilities 206.65
5103 04/16/04 Power Company Office Utilities 80.47
5133 05/08/04 Power Company Office Utilities 86.42
5159 05/22/04 Gas Company Office Utilities 159.23
5181 06/02/04 Power Company Office Utilities 80.21
5182 06/16/04 Gas Company Office Utilities 89.91
5204 07/07/04 Power Company Office Utilities 106.06
5229 07/21/04 Gas Company Office Utilities 71.51
5233 07/30/04 Gas Company Office Utilities 44.73
5262 08/13/04 Power Company Office Utilities 113.69
5272 09/02/04 Power Company Office Utilities 98.81
5287 09/16/04 Gas Company Office Utilities 48.72
5295 10/09/04 Gas Company Office Utilities 54.52
5315 10/23/04 Power Company Office Utilities 95.44
5323 10/29/04 Gas Company Office Utilities 62.94
5344 11/12/04 Power Company Office Utilities 77.10
5366 12/07/04 Gas Company Office Utilities 109.23
5375 12/11/04 Power Company Office Utilities 111.51
Total 2,797.54
ITEM COST
Estimator's Wages $15/hr for 20 hrs/week
Office Manager's Wages $12/hr for 40 hrs/week
Social Security 6.2% of wages to $97,500
Medicare 1.45% of wages
FUTA 0.8% to $7,000 of wages per employee
SUTA 2.0% to $12,000 of wages per employee
Workers'Comp. $1.25 per $100 of wages
General Liability 0.67% of wages
401(k) 50% match up to 6% of wages
Health Insurance $150/month per employee
Vacation/Sick/Holidays 10 days per year
Rent $12 per square foot per year
Utilities $0.25 per square foot per month
The employees pay $200 per month toward their insurance, which is not
subject to social security and Medicare taxes.
Advertising
Bad Debts
Bank Fees
Car and Truck Expenses
Charitable Contributions
Computer and Office Furniture
Depreciation
Dues and Memberships
Employee Wages and Salaries
Employee Benefits
Employee Retirement
Employee Recruiting
Employee Training
Employee Taxes
Insurance
Interest Expense
Janitorial and Cleaning
Legal and Professional Services
Meals and Entertainment
Office Supplies
Office Purchases
Office Rent
Office Utilities
Postage & Delivery
Promotion
Publications and Subscriptions
Repairs and Maintenance
Taxes and Licenses
Telephone
Travel
Unallocated Labor
Unallocated Materials
Miscellaneous
A budget of "0" for a category is acceptable. Present your budget in the
following format:
CATEGORY AMOUNT $/YEAR JUSTIFICATION