ACCT $303-$ Individual Homework

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GreenBuild Construction Company

GreenBuild Construction is a mid$-$sized company specialising in residential projects. The company has established the following structure for its revenue and cost:

Fixed Costs: $$30,000$ per month, which includes equipment leases, salaries for permanent staff, and overhead costs.

Variable Cost per Project: $$15,000,$ encompassing materials, subcontractor fees, and other project$-$specific expenses.

Revenue per Project: $$40,000,$ which is the average income generated from successfully completed projects.

The company's management is interested in preparing a flexible budget to better understand the financial implications of varying project completions, especially during peak construction seasons.

Tasks:

Create a flexible budget for the following number of projects completed $(2$ projects, $5$ projects and $10$ projects$)$

For each level of project completion, calculate $($Total Costs, Total Revenue, and Profit or Loss$)$

Discuss how the flexible budget can assist GreenBuild in planning for peak seasons and managing cash flow.

How should the management respond if actual project completions are significantly lower than the flexible budget projections? Discuss strategies for cost management and resource allocation.

How can the insights from the flexible budget help GreenBuild forecast future project completions and prepare for seasonal demand? Provide specific examples of actions the company might take based on this analysis.