CASE Background: Sparkling Clean Services (SCS) is a local business in the Tri-cities area. It provides cleaning services to residential households and commercial establishments. Both households and businesses sign contracts with SCS. As the contractor, SCS dispatches its crew to the locations. The crew performs the cleaning as per the contracts and reports back to the company main desk. The main desk then prepares the invoice and sends them to the clients. Clients have one day to pay the invoice. Sales volume can vary from one quarter to the next. In terms of expenses, the main expense for SCS relates to labour. They pay crew members competitive wages and benefits. The wage rate is calculated on an hourly basis and is fixed for the entire year. The next expense item is cleaning supplies. SCS accounts for cleaning supplies relative to the hours worked. For example, they estimate that cleaning supplies are consumed at a rate of 0.2 litres per labour hour. This is a good measure because the longer it takes for a site to be cleaned, the more the consumption of cleaning supplies. Cleaning supplies are procured from a prominent vendor and the cost Is fixed for the entire year. Sometimes clients are not happy about the cleaning services and register a complaint. In that case, the crew is dispatched again for a second cleaning. The hours accruing from such scenarios are not billed to the clean as this constitutes a 'service recovery. However, the crew is paid for such hours. SCS maintains a record of these hours and classifies them as 'unproductive hours', or 'unbilled hours. This is calculated as a percentage of revenue earning hours (e.g., 10% of revenue generating hours). For the purpose of this assignment, assume that there is no consumption of cleaning materials when this second cleaning is being done. 3 | Page MGMT 8500 Assignment three: BUDGET ASSIGNMENT-F21 Budget for the year 2020: The budget for the year 2020 was prepared in December 2019 and had the following components: Revenue: The revenue is calculated as number of hours that the crew works on a site, multiplied by the contracted separately, and there is a total for the combined hours worked. The revenue for each segment is arrived at by multiplying the hours for the segment by the rate. The budget is prepared for four quarters, one to four. For 2020, the budgeted sales hours were: Quarter 1 2 3 4 3,500 3,700 4,000 3,800 Budgeted commercial sales in hours Budgeted residential sales in hours 2,000 2,200 1,900 2,300 For 2020, the budgeted sales hours were: 1 N 2 3 4 Quarter Selling price per hour (commercial) Selling price per hour (residential) $44 $44 $44 $44 $53 $53 $53 $53 Direct Labour expense: SCS will pay its employees an hourly rate of $ 22 for the entire year. Cleaning supply usage: The budgeted usage is 0.25 litre / labour hour for the commercial segment and 0.15 litre/ labour hour for the residential segment. This is constant for the entire year. Fixed overhead: To support the cleaning operations, there are four items of expenditure. These are designated as overheads and their budgeted expenses are as follows: Receptionist: Budgeted expense is $ 5 000 per quarter and is the same for all four quarters. Depreciation: This relates to the depreciation of vehicles used to transport employees to client locations. Budgeted expense is $ 9 000 per quarter and is the same for all four quarters. Gas: Budgeted expenditure on gas is $ 7,500 and is the same for all four quarters. Maintenance: Budgeted expenditure on Maintenance is $ 1 000 per quarter and is the same for all four quarters. Actual results for the year 2020. It is now January 7, 2021 and Sparkling Clean Services (SCS) is comparing the actual expenses against their budget. Here is what they found. Revenue: For 2020, the actual sales hours were: 1 2 3 Quarter Actual sales - commercial 3,400 3,700 3,800 4,000 2,200 Actual sales - residential - 2,150 2,250 2,000 For 2020, the actual hourly revenue was: 1 N 3 4 Quarter Actual selling price-commercial Actual selling price - residential $45 $45 $45 $50 $45 $50 $50 $50 5 Page Direct Labour expense: SCS paid its employees an hourly rate of $ 19 for the entire year. Cleaning supply usage: The actual usage was 0.22 litre / labour hour for the commercial segment and 0.15 litre/ labour hour for the residential segment. This was constant for the entire year. Cleaning supply expense: Actual expense was $5.60 per liter for the entire year. Fixed overhead: To support the cleaning operations, there are four items of expenditure. These are designated as overheads and their budgeted expenses are as follows: Receptionist: Actual expense was $ 6 200 per quarter and is the same for all four quarters. Depreciation: This relates to the depreciation of vehicles used to transport employees to client locations. Actual expense was $ 9 200 per quarter and was the same for all four quarters. Gas: Actual expenditure on gas was $ 7 100 and was the same for all four quarters, Maintenance Actual expenditure on Maintenance was $100 per quarter and was the same for all four auarters Unproductive (unbilled) factor: Cleaning crews had to work 11% over the revenue generating hours to attend to complaints and do a second cleaning. These hours were not billable to clients, but Sparkling Clean Services (SCS) would pay the employees for this time they worked. For the purpose of this assignment, assume that there is no consumption of cleaning materials when this second cleaning was done. 6 Page MGMT 8500 - Assignment three: BUDGET ASSIGNMENT-F21 Required: Part A For this part you will use the template provided in Excel Workbook format. Complete the following run Two Three Four Five case and develop budget po Input Database Populate the section K4:Q35 with data from the above case and develop the actual parameters. Static Budget Populate the section A7:F29 with data from the spreadsheet 'Input Database' and develop the static budget. Actual Budget Populate the section A7:F29 with data from the spreadsheet 'Input Database and develop the actual budget. Flexible Budget Populate the section AZ:F29 with data from the spreadsheet 'Input Database' and develop the flexible budget. Var Analysis - Static and Populate the section AS:E26 with data from the Flex spreadsheets 'Static Budget' and 'Actual Budget' and develop the static budget variance. Var Analysis - Static and Populate the section G5:326 with data from the Flex spreadsheet 'Actual Budget' and 'Flexible Budget and develop the flexible budget variance. Material variances Using applicable data complete the analysis of Material variances for both the commercial and Six Seven Eight Nine Labour variances Using applicable data complete the analysis of Material variances for both the commercial and residential segments. 7| Page MGMT 8500 - Assignment three: BUDGET ASSIGNMENT-F21 Other guidelines: Data should be entered in the 'Input Database spreadsheet only. For all other spreadsheets, you must use cell references, linking data from 'Input Database' or other spreadsheets. Do not enter data or calculations without cell references. To calculate variances, you need to use 'IF formula. Part B. in week 10, your Professor will be discussing about ethical practices during budget preparation. One such practice involves use of 'budgetary 'slack'. Reflecting on this learning experience, you will write . Data Review View Autosum Wan Text General Margt ans % 911 Condition Format Cell Formatting Table Styles Alignment Muimbe Style Insert Delde Formal Clear Sort Find Filter Seed Editing ht SCS B 1 2 3 4 D SCS Operating Budget for the period Jan-Dec 20 Quarters 3 1 2 Year Marks 5 6 7 Sales budget 8 Sales Commercial 9 Sales residential 10 Total sales 11 12 13 Direct material budget 14 Variable costs commercial 15 Variable costs residential 16 Total variable costs 17 18 19 Labour budget 2 Activate Windows cos Haterlarances Labour varan Stati Budoet Actual doet Fixbil Budget Var Anas Static and Flex DNG 11:21 PM 26/11/2011 121 Budget Assignment Student template Microsoft Excel View tas Data Review General Autasun- ! 27 Wrap Ten te e Merge Center Alignment %20 Cell Incert Delete Format Conditional Format Formatting as Table Styles Styles Clear Sort & Find Filter Select Editing Number Cell A B G H D E SCS Operating Budget for the period Jan-Dec 20 Quarters 3 1 2 4 Year Marks 2 Labour budget Commercial Residential Total labour 2 Fixed Overhead: Receptionist 6 Depreciation 7 Gas 8 Maintenance 9 Total 30 31 Active Vinde Total Static Budget Actual udget Farbe dont Var Ana Static and flex Materal variances Labour variance 10 e ENG 11:22 PM 26/11/2001 Budget Asiainment - Student template Microsoft Excel mulas Data Review View Currency Fap Tot Merge Center Alignment 16 Insert Delete Format Conditional Format Cell Formatting as Table Styles Style > Autosum Fill Sort Find Orar Filter Seled Edding Number Cell B D E SCS Operating results for the period Jan Dec 20 Quarters 3 2 4 Year Marks 2 Sales budget Sales Commercial Sales residential Total sales 1 12 3 Direct material budget 14 Variable costs commercial 15 Variable costs residential 16 Total variable costs 17 18 19 Labour budget Stabc Budget ActualBudet Flexible Budot Var Anastatic and Fox Activate Windows TE Matarul varances Labour varand 100 197 ING 11:22 PM 26/11/2021 SCS Operating results for the period Jan-Dec 20 Quarters 3 1 2 4 Year Marks 2 Direct material budget Variable costs commercial Variable costs residential Total variable costs Labour budget o Commercial 1 Residential 2 Total labour 13 24 Fixed Overhead: 25 Receptionist AGREBRO Activate Wind Dating Materal Varances Labour varianced Static Budget Actual Budget Flexble Budget V Analys Static and Flex 11 2 SCS Operating results for the period Jan-Dec 20 3 4 Quarters 3 2 4 Year Marks 2 5 20 Commercial 21 Residential 22 Total labour 23 24 Fixed Overhead: 25 Receptionist 26 Depreciation 27 Gas 28 Maintenance 29 Total 30 31 32 33 Total 8 e Activate Windows SCS Flexible budget for the period Jan-Dec 20 Quarters 3 2 Year Marks 2 2 Sales Commercial Sales residential 0 Total sales 1 2 h3 Direct material budget 14 Variable costs commercial 15 Variable costs residential 16 Total variable costs 17 18 19 Labour budget 20 Commercial 21 Residential 2 Activate Windows Settings to activate Wa 2 2 SCS Statku Varlane Actual for the atic for the year Vatice Maris WIE Flexible Budget Varlene Actul for the yok leuke for the year Vatice Sales budget Sales Cocial Sales residential 1 Totales 0 10 Direct material but 11 Variable costs commercial 12 Variable costs 13 Total vanable costs IS 16 Labobo 17 Cod Residential 1 Total wou 20 1d Overhead 22 centinis 23 Dec 34 15 de 20 T Theodout Ve Anal State and Time Marancs Labour varno lin Me TEM D G 13 M Direct Materials - Residential 14 15 16 12 Actual Quantity - 18 Actual Rate AR 19 Total 20 Actual Quantity Standard Rate SR Total Standard Quantity -50 Standard Rate-SR Total Price Variance Quantity Variance Total Variance 22 23 24 25 26 27 23 30 30 31 Tots 12 Fax Budget Vand Material varunces Labor and Ques Growth Quarter over Quare Sestol Budete total sales in hun Bungeted commerciales in hours 2 budgeted residential sales in hours Actus total sales Actual sales.com Actual sala residential Seine Actualitat Actual presidencia 2. Selling price per hour commercial 10 Selling price per hour residentian 21 12 Donne Centre 15 Comme 16 Besidential Director AL/ COM esidential 20 21 Bec ptit 22 Deption 23 Maintenance Receptionist Depreciation Mence pinpama he Hatalanes arance Sta hodge Input Database Var AS get e LI CASE Background: Sparkling Clean Services (SCS) is a local business in the Tri-cities area. It provides cleaning services to residential households and commercial establishments. Both households and businesses sign contracts with SCS. As the contractor, SCS dispatches its crew to the locations. The crew performs the cleaning as per the contracts and reports back to the company main desk. The main desk then prepares the invoice and sends them to the clients. Clients have one day to pay the invoice. Sales volume can vary from one quarter to the next. In terms of expenses, the main expense for SCS relates to labour. They pay crew members competitive wages and benefits. The wage rate is calculated on an hourly basis and is fixed for the entire year. The next expense item is cleaning supplies. SCS accounts for cleaning supplies relative to the hours worked. For example, they estimate that cleaning supplies are consumed at a rate of 0.2 litres per labour hour. This is a good measure because the longer it takes for a site to be cleaned, the more the consumption of cleaning supplies. Cleaning supplies are procured from a prominent vendor and the cost Is fixed for the entire year. Sometimes clients are not happy about the cleaning services and register a complaint. In that case, the crew is dispatched again for a second cleaning. The hours accruing from such scenarios are not billed to the clean as this constitutes a 'service recovery. However, the crew is paid for such hours. SCS maintains a record of these hours and classifies them as 'unproductive hours', or 'unbilled hours. This is calculated as a percentage of revenue earning hours (e.g., 10% of revenue generating hours). For the purpose of this assignment, assume that there is no consumption of cleaning materials when this second cleaning is being done. 3 | Page MGMT 8500 Assignment three: BUDGET ASSIGNMENT-F21 Budget for the year 2020: The budget for the year 2020 was prepared in December 2019 and had the following components: Revenue: The revenue is calculated as number of hours that the crew works on a site, multiplied by the contracted separately, and there is a total for the combined hours worked. The revenue for each segment is arrived at by multiplying the hours for the segment by the rate. The budget is prepared for four quarters, one to four. For 2020, the budgeted sales hours were: Quarter 1 2 3 4 3,500 3,700 4,000 3,800 Budgeted commercial sales in hours Budgeted residential sales in hours 2,000 2,200 1,900 2,300 For 2020, the budgeted sales hours were: 1 N 2 3 4 Quarter Selling price per hour (commercial) Selling price per hour (residential) $44 $44 $44 $44 $53 $53 $53 $53 Direct Labour expense: SCS will pay its employees an hourly rate of $ 22 for the entire year. Cleaning supply usage: The budgeted usage is 0.25 litre / labour hour for the commercial segment and 0.15 litre/ labour hour for the residential segment. This is constant for the entire year. Fixed overhead: To support the cleaning operations, there are four items of expenditure. These are designated as overheads and their budgeted expenses are as follows: Receptionist: Budgeted expense is $ 5 000 per quarter and is the same for all four quarters. Depreciation: This relates to the depreciation of vehicles used to transport employees to client locations. Budgeted expense is $ 9 000 per quarter and is the same for all four quarters. Gas: Budgeted expenditure on gas is $ 7,500 and is the same for all four quarters. Maintenance: Budgeted expenditure on Maintenance is $ 1 000 per quarter and is the same for all four quarters. Actual results for the year 2020. It is now January 7, 2021 and Sparkling Clean Services (SCS) is comparing the actual expenses against their budget. Here is what they found. Revenue: For 2020, the actual sales hours were: 1 2 3 Quarter Actual sales - commercial 3,400 3,700 3,800 4,000 2,200 Actual sales - residential - 2,150 2,250 2,000 For 2020, the actual hourly revenue was: 1 N 3 4 Quarter Actual selling price-commercial Actual selling price - residential $45 $45 $45 $50 $45 $50 $50 $50 5 Page Direct Labour expense: SCS paid its employees an hourly rate of $ 19 for the entire year. Cleaning supply usage: The actual usage was 0.22 litre / labour hour for the commercial segment and 0.15 litre/ labour hour for the residential segment. This was constant for the entire year. Cleaning supply expense: Actual expense was $5.60 per liter for the entire year. Fixed overhead: To support the cleaning operations, there are four items of expenditure. These are designated as overheads and their budgeted expenses are as follows: Receptionist: Actual expense was $ 6 200 per quarter and is the same for all four quarters. Depreciation: This relates to the depreciation of vehicles used to transport employees to client locations. Actual expense was $ 9 200 per quarter and was the same for all four quarters. Gas: Actual expenditure on gas was $ 7 100 and was the same for all four quarters, Maintenance Actual expenditure on Maintenance was $100 per quarter and was the same for all four auarters Unproductive (unbilled) factor: Cleaning crews had to work 11% over the revenue generating hours to attend to complaints and do a second cleaning. These hours were not billable to clients, but Sparkling Clean Services (SCS) would pay the employees for this time they worked. For the purpose of this assignment, assume that there is no consumption of cleaning materials when this second cleaning was done. 6 Page MGMT 8500 - Assignment three: BUDGET ASSIGNMENT-F21 Required: Part A For this part you will use the template provided in Excel Workbook format. Complete the following run Two Three Four Five case and develop budget po Input Database Populate the section K4:Q35 with data from the above case and develop the actual parameters. Static Budget Populate the section A7:F29 with data from the spreadsheet 'Input Database' and develop the static budget. Actual Budget Populate the section A7:F29 with data from the spreadsheet 'Input Database and develop the actual budget. Flexible Budget Populate the section AZ:F29 with data from the spreadsheet 'Input Database' and develop the flexible budget. Var Analysis - Static and Populate the section AS:E26 with data from the Flex spreadsheets 'Static Budget' and 'Actual Budget' and develop the static budget variance. Var Analysis - Static and Populate the section G5:326 with data from the Flex spreadsheet 'Actual Budget' and 'Flexible Budget and develop the flexible budget variance. Material variances Using applicable data complete the analysis of Material variances for both the commercial and Six Seven Eight Nine Labour variances Using applicable data complete the analysis of Material variances for both the commercial and residential segments. 7| Page MGMT 8500 - Assignment three: BUDGET ASSIGNMENT-F21 Other guidelines: Data should be entered in the 'Input Database spreadsheet only. For all other spreadsheets, you must use cell references, linking data from 'Input Database' or other spreadsheets. Do not enter data or calculations without cell references. To calculate variances, you need to use 'IF formula. Part B. in week 10, your Professor will be discussing about ethical practices during budget preparation. One such practice involves use of 'budgetary 'slack'. Reflecting on this learning experience, you will write . Data Review View Autosum Wan Text General Margt ans % 911 Condition Format Cell Formatting Table Styles Alignment Muimbe Style Insert Delde Formal Clear Sort Find Filter Seed Editing ht SCS B 1 2 3 4 D SCS Operating Budget for the period Jan-Dec 20 Quarters 3 1 2 Year Marks 5 6 7 Sales budget 8 Sales Commercial 9 Sales residential 10 Total sales 11 12 13 Direct material budget 14 Variable costs commercial 15 Variable costs residential 16 Total variable costs 17 18 19 Labour budget 2 Activate Windows cos Haterlarances Labour varan Stati Budoet Actual doet Fixbil Budget Var Anas Static and Flex DNG 11:21 PM 26/11/2011 121 Budget Assignment Student template Microsoft Excel View tas Data Review General Autasun- ! 27 Wrap Ten te e Merge Center Alignment %20 Cell Incert Delete Format Conditional Format Formatting as Table Styles Styles Clear Sort & Find Filter Select Editing Number Cell A B G H D E SCS Operating Budget for the period Jan-Dec 20 Quarters 3 1 2 4 Year Marks 2 Labour budget Commercial Residential Total labour 2 Fixed Overhead: Receptionist 6 Depreciation 7 Gas 8 Maintenance 9 Total 30 31 Active Vinde Total Static Budget Actual udget Farbe dont Var Ana Static and flex Materal variances Labour variance 10 e ENG 11:22 PM 26/11/2001 Budget Asiainment - Student template Microsoft Excel mulas Data Review View Currency Fap Tot Merge Center Alignment 16 Insert Delete Format Conditional Format Cell Formatting as Table Styles Style > Autosum Fill Sort Find Orar Filter Seled Edding Number Cell B D E SCS Operating results for the period Jan Dec 20 Quarters 3 2 4 Year Marks 2 Sales budget Sales Commercial Sales residential Total sales 1 12 3 Direct material budget 14 Variable costs commercial 15 Variable costs residential 16 Total variable costs 17 18 19 Labour budget Stabc Budget ActualBudet Flexible Budot Var Anastatic and Fox Activate Windows TE Matarul varances Labour varand 100 197 ING 11:22 PM 26/11/2021 SCS Operating results for the period Jan-Dec 20 Quarters 3 1 2 4 Year Marks 2 Direct material budget Variable costs commercial Variable costs residential Total variable costs Labour budget o Commercial 1 Residential 2 Total labour 13 24 Fixed Overhead: 25 Receptionist AGREBRO Activate Wind Dating Materal Varances Labour varianced Static Budget Actual Budget Flexble Budget V Analys Static and Flex 11 2 SCS Operating results for the period Jan-Dec 20 3 4 Quarters 3 2 4 Year Marks 2 5 20 Commercial 21 Residential 22 Total labour 23 24 Fixed Overhead: 25 Receptionist 26 Depreciation 27 Gas 28 Maintenance 29 Total 30 31 32 33 Total 8 e Activate Windows SCS Flexible budget for the period Jan-Dec 20 Quarters 3 2 Year Marks 2 2 Sales Commercial Sales residential 0 Total sales 1 2 h3 Direct material budget 14 Variable costs commercial 15 Variable costs residential 16 Total variable costs 17 18 19 Labour budget 20 Commercial 21 Residential 2 Activate Windows Settings to activate Wa 2 2 SCS Statku Varlane Actual for the atic for the year Vatice Maris WIE Flexible Budget Varlene Actul for the yok leuke for the year Vatice Sales budget Sales Cocial Sales residential 1 Totales 0 10 Direct material but 11 Variable costs commercial 12 Variable costs 13 Total vanable costs IS 16 Labobo 17 Cod Residential 1 Total wou 20 1d Overhead 22 centinis 23 Dec 34 15 de 20 T Theodout Ve Anal State and Time Marancs Labour varno lin Me TEM D G 13 M Direct Materials - Residential 14 15 16 12 Actual Quantity - 18 Actual Rate AR 19 Total 20 Actual Quantity Standard Rate SR Total Standard Quantity -50 Standard Rate-SR Total Price Variance Quantity Variance Total Variance 22 23 24 25 26 27 23 30 30 31 Tots 12 Fax Budget Vand Material varunces Labor and Ques Growth Quarter over Quare Sestol Budete total sales in hun Bungeted commerciales in hours 2 budgeted residential sales in hours Actus total sales Actual sales.com Actual sala residential Seine Actualitat Actual presidencia 2. Selling price per hour commercial 10 Selling price per hour residentian 21 12 Donne Centre 15 Comme 16 Besidential Director AL/ COM esidential 20 21 Bec ptit 22 Deption 23 Maintenance Receptionist Depreciation Mence pinpama he Hatalanes arance Sta hodge Input Database Var AS get e LI