Preparing an overhead budget and an other expenses budget Hornick and Sena, the systems...

Preparing an overhead budget and an other expenses budget

Hornick and Sena, the systems consultants in P9-3, budgeted overhead and other expenses as follows for the year ended December 31, 2013:

Overhead:

Depreciation–equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000

Depreciation–building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,000

Fringe benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385,000

Photocopying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,000

Secretarial support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465,000

Telephone/fax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,000

Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193,000

Other direct expenses:

Travel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $123,000

Meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,000

Required:

1. Prepare an Overhead budget.

2. Prepare an Other Expenses budget.

Reference:

Preparing a revenue budget and a labor budget for a service business

Hornick and Sena, partners in a systems consulting firm, budgeted the following professional labor hours for the year ended December 31, 2013:

Partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000

Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000

Staff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000

Partners have a billing rate of $225 per hour and actually earn $110 per hour. Associates bill out at $140 per hour and earn $85 per hour. Staff bill out at a rate of $75 per hour and earn $35 per hour.

Required:

1. Prepare a revenue budget.

2. Prepare a professional labor budget.