Question

Administrative Expense Budget Green Earth Landscaping Company provides monthly and weekly landscaping and maintenance s...


Administrative Expense Budget

Green Earth Landscaping Company provides monthly and weekly landscaping and maintenance services to residential customers in the tri-city area. Green Earth has no variable administrative expense. Fixed administrative expenses for June, July, and August include:

Salaries $9,700
Insurance 2,300
Depreciation 4,300
Accounting services 500

Required:

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1. Construct an administrative expense budget for Green Earth Landscaping Company for the three summer months. Show total amounts by month and in total for the three-month period.

Green Earth Landscaping CompanyAdministrative Expense BudgetFor the Summer Months
  June July August Total
         
Salaries $fill in the blank eb50eef5802d02f_1 $fill in the blank eb50eef5802d02f_2 $fill in the blank eb50eef5802d02f_3 $fill in the blank eb50eef5802d02f_4
Insurance fill in the blank eb50eef5802d02f_5 fill in the blank eb50eef5802d02f_6 fill in the blank eb50eef5802d02f_7 fill in the blank eb50eef5802d02f_8
Depreciation fill in the blank eb50eef5802d02f_9 fill in the blank eb50eef5802d02f_10 fill in the blank eb50eef5802d02f_11 fill in the blank eb50eef5802d02f_12
Accounting services fill in the blank eb50eef5802d02f_13 fill in the blank eb50eef5802d02f_14 fill in the blank eb50eef5802d02f_15 fill in the blank eb50eef5802d02f_16
Total administrative expense $fill in the blank eb50eef5802d02f_17 $fill in the blank eb50eef5802d02f_18 $fill in the blank eb50eef5802d02f_19 $fill in the blank eb50eef5802d02f_20
 

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2. What if Green Earth Landscaping Company's insurance rates increased at the beginning of July to $3,000 per month? How would that affect monthly administrative expense?

Total monthly administrative cost would 

 

 by $fill in the blank 40b217fed059f9c_2.

Answer

An administrative expense budget for Green Earth Landscaping Company for the three summer months and in total is provided below:

Answer 1

                                              Green Earth Landscaping Company

                                                 Administrative Expense Budget

   June    July    August   Total 
Salaries          9,700         9,700         9,700      29,100
Insurance          2,300         2,300         2,300         6,900
Depreciation          4,300         4,300         4,300      12,900
Accounting services             500            500            500         1,500
Total administrative expense       16,800      16,800      16,800      50,400

Answer 2

If Green Earth Landscaping Company's insurance rates increased at the beginning of July to $3,000 per month, administrative expense budget will look like as under:

   June    July    August   Total 
Salaries          9,700         9,700         9,700      29,100
Insurance          2,300         3,000         3,000         8,300
Depreciation          4,300         4,300         4,300      12,900
Accounting services             500            500            500         1,500
Total administrative expense       16,800      17,500      17,500      51,800

Hence, if Green Earth Landscaping Company's insurance rates increased at the beginning of July to $3,000 per month, total monthly administrative cost would increase by $1,400 ($51,800 - $50,400).

 

 

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