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 ...........$9,600
Insurance ......... 2,500
Depreciation ....... 3,700
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.
2. What if Green Earth Landscaping Company’s insurance rates increased at the beginning of July to $2,600 per month? How would that affect monthly administrative expense?