Purchase Solution

Budget Inc: Internal Audit

Not what you're looking for?

Ask Custom Question

The management of Budget Inc. is conducting an internal audit and preparing the operating budget based on wages and salaries. They are requesting the following:

1. At what point does payroll reach the break- even point with the service calls (Volume)?

The accounting department provided you with the following information:
- Technician wages: $24.00
- Manager's salary: $57,000
- Initially, the contribution margin (CM) ratio is 38%

2. Using your answers from above, what if:
Wages where increased by 2%
Manager's salary was increased by 5%
How many more service calls (Volume) would be needed to remain at a break even point?

3. Using your answers from above, what if:
Unit Revenue was increased by $5.-
Advertising expenses are increased by $15,000
Service calls (Volume) is increased by 27%
What would the Operating Income be?

Purchase this Solution

Solution Summary

The key to this problem is to solve for units and sales price per unit. After that, the three analyses are possible (and you can't do it without doing that first). Click in cells to see computations. Instructional marks are on the attached worksheet template.

Solution Preview

The key to this problem is to solve for units and sales price ...

Solution provided by:
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution

Free BrainMass Quizzes
Learning Lean

This quiz will help you understand the basic concepts of Lean.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.