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
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?