Solutions to the Excel sheet.
Direct number of labor hours in a year as budgeted = (Estimated jobs * Approximated hours to finish a job) = 13,750 * $18 = $247,500.
Variable Overhead in an hour = (Budgeted hour for job completion * Overhead variable cost in a labor hour) = 2.5 * $4.5 = $11.25
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Fixed cost of overhead per unit= (Overhead costs/ Overall budgeted hours) * hour budgeted per unit = ($ 25,000/ 13,750) * 2.5 = $4.5454
Total costs for budget= Labor cost + (Variable overhead * total jobs) + Fixed cost of overhead per unit + Miscellaneous expenses + Indirect costs of labor.
= $ ((247, 500 + (11.25* 5500) + 25,000 + 10,000 + 6,500)) = $ 350, 875.
Estimated total number of jobs = 5,500
No charge in re-treatment = 5,500 * 5% = 275 jobs.
Jobs chargeable = 5,500 – 275 = 5,225 jobs.
Budgeted revenue = Treatment cost of each house * jobs chargeable.
= $ 100 * 5,225
= $ 522, 500.
