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:
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.
| 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 |
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.
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).