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5 Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow Service calls (per subscriber) Subscribers 04:37:40 600 0.6 March April 700 0.9 May 1,400 1.5 June 1,600 2.5 July 1,600 3.0 August 1,500 2.4 eBook Print The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of service calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred in August. All costs except depreciation are paid in cash. References Service costs Variable costs $ 24,000 22,000 Maintenance and repair Depreciation (fixed) 42,000 Total $8,000 Marketing and administrative costs Marketing (variable) $ 14,500 Adeinistrative (fixed) 55,000 Total $ 69,500 $157,500 Total costs Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September Required: Prepare a budgeted income statement for September. (Do not round intermediate calculations.) VARMIT-GONE Budgeted Income Statement 2 points 8 04:37:34 Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of service calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred in August. All costs except depreciation are paid in cash. Service costs Variable costs eBook $ 24,000 22,000 Maintenance and repair Depreciation (fixed) 42,000 Total $ 88,000 Marketing and administrative costs Print $ 14,500 Marketing (variable) Administrative (fixed) 55,000 Total $ 69,500 $157,500 References Total costs Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September Required: Prepare a budgeted income statement for September. (Do not round intermediate calculations.) VARMIT-B-GONE Budgeted Income Statement For the Month of September Sales revenue Service costs Variable costs Maintenance and repair Depreciation (fixed) Total service costs Marketing and administrative Administrative (fixed) Total marketing and administrative costs Total costs Operating profit $ $ S $ 0 0 0