E$9-2$

Computing profit or loss on a bid Brown and Stetham, plumbers, successfully bid $$30,000$ for the plumbing work on a new luxury home. Total direct labor cost on the job was $$9,500,$ other direct costs were $$2,500,$ and overhead is charged to jobs at $150\%$ of direct labor cost.

$1.$ Compute the profit or loss on the job in $($a$)$ dollars and $($b$)$ as a percentage of the bid price.

$2.$ Express labor and overhead as a percentage of total costs.

E$9-3$

Preparing a revenue budgetChiao and Piaker, CPAs, budgeted for the following professional labor hours for the coming year: partners, $1,500$; managers, $5,000$; and staff, $20,000.$ Budgeted billing rates are: partners, $$250$ per hour; managers, $$120$ per hour; and staff accountants, $$80$ per hour.

Prepare a revenue budget for the year ending December $31,2011.$

E$9-4$

Preparing a budgeted income statement

Jones and Wang,physicians, budgeted for the following revenue and expenses for the month of September:

Depreciation$$equipment $.............................$ $$1,850$

Fringe benefits $............................................3,300$

Lease expense $..............................................2,500$

Nursing wages $..............................................4,500$

Physicians$$ salaries $.....................................28,000$

Patient revenue $.............................................58,500$

Secretarial support $......................................2,200$

Utilities $..................................................650$

Prepare a budgeted income statement for the month ending September $30,2011.$

P$-9-2$

Cost performance report and budgeted profit and actual profit for a service business

The budget for the Baldwin Equipment, Inc. job in P$9-1$ consisted of the following amounts:

Partners$$ salary and overhead $.............$ $$6,300$

Associates$$ salary and overhead $...........9,175$

Travel $....................................4,150$

Telephone$/$fax$/$copying $....................4,175$

The successful bid price of the job was $$30,000$

Required:

$1.$ Prepare a cost performance report.

$2.$ Computethe budgeted profit and the actual profit on the job.