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1. SCS Flexible budget for the period Jan - Dec '20 Quarters 1 2 3 4 Year Sales budget Sales Commercial Sales residential Total sales Direct material budget Variable costs commercial Variable costs residential Total variable costs Labour budget Commercial Residential Total labour Fixed Overhead: Receptionist Depreciation Covid related Employee Benefit related Unproductive Total

CASE Background: Sunflower Cleaning Services (SFCS) 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 SFCS. As the contractor, SFCs dispatches its crew to the locations. The crew performs the cleaning asper the contracts and reports back to the company main desk. The main desk then prepares the invoiceand zend 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 SFCS relates to labour. They pay crew members competitivewages 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. SFCS accounts for cleaning supplies relative to the hours worked. For example, they estimate that cleaning Supplies are consumed at a rate of 0.2 ltres 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 cervices 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 client as this constitutes a service recovery. However, the crew is paid for such hours. SFCS maintains arecord of these hours and classifies them as 'unproductive hours', or unbilled hours. This is calculated as a percentage of revenue earning hours (4.5.. 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 Budget for the year 2021: The budget for the year 2021 was prepared in December 2020 and had the following components: Revenue: The revenue is calculated a number of hours that the crew works on a site, multiplied by the contracted rate with the client. The hours worked in the residential and commercial segments are shown separately and there is a total for the combined hours worked. The revenue for each segment is arrived st by multiplying the hours for the segment by the rate. The budget is prepared for four quarters, one to four. 1 2 3 For 2021, the budgeted sales hours were: Quarter Budgeted commercial sales in 3,700 hours Budgeted residential sales in hours 2,300 3,300 3,500 3,400 1,900 2,500 2,900 2 For 2021, the budgeted selling price per hours were: Quarter 1 Selling price per hour commercial $34 Selling price per hour (residential $42 3 $54 $54 $42 $42 Direct Labour expense: SFC will pay its employees an hourly rate of $23 for the entire year. Cleaning supply usage: The budgeted usage is 0.34 litre / labour hour for the commercial segment and 0.27 litre/labour hour for the residential segment. This is constant for the entire year. Cleaning supply expense: Budgeted expense is $6.40 per litre 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 $3.300 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 $7.500 per quarter and is the same for all four quarters. Covid related Budgeted expenditure on covid related overhead is $5,400 and is the same for all four quarters Employee Benefit related: Budgeted expenditure on employee benefit related overhead is $1,700 per quarter and is the same for an four quarters. Actual results for the year 2021. it is now January 7, 2022, and Sunflower Clean Services (SFCS) is comparing the actual expenses againsttheir budget. Here is what they found. Revenue: For 2021, the actual sales hours were: 2 3 Quarter Actual sales commercial Actual sales residential 3.100 3,600 3,300 3,500 2,400 2.100 2,100 2,600 For 2021, the actual hourly revenue was: 1 2 3 Quarter Actual selling price-commercial Actual selling price - residential $33 $53 $33 $33 $41 $41 $41 $41 Direct Labour expense: SFCS paid its employees an hourly rate of $22 for the entire year. Cleaning supply usage: The actual usage was 0.30litre / labour hour for the commercial segment and 0.25 litre/ labour hour for the residential segment. This was constant for the entire year. Cleaning supply expense: Actual expense was $6.30 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 per quarter was as follows: Quarter 1 2 3 Amount 3,100 3,100 3.100 3,100 Depreciation: This relates to the depreciation of vehicles uzed to transport employees to client locations. Actual expense was $8,000 per quarter and was the same for all four quarters Covid related: Actual expense per quarter was as follows: Quarter 1 2 3 Amount 7,000 7,100 3.800 6.000 4 Employee benefit related: Actual expense per quarter was as follows: Quarter 1 2 3 Amount 1,500 1,800 1,600 1,900 Unproductive (unbilled) factor: Cleaning crews had to work 7% over the revenue generating hours to attend to compisints and do second cleaning. These hours were not bilable to clients, but Sunflower Clean Services (SFCS) would paythe 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. CASE Background: Sunflower Cleaning Services (SFCS) 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 SFCS. As the contractor, SFCs dispatches its crew to the locations. The crew performs the cleaning asper the contracts and reports back to the company main desk. The main desk then prepares the invoiceand zend 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 SFCS relates to labour. They pay crew members competitivewages 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. SFCS accounts for cleaning supplies relative to the hours worked. For example, they estimate that cleaning Supplies are consumed at a rate of 0.2 ltres 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 cervices 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 client as this constitutes a service recovery. However, the crew is paid for such hours. SFCS maintains arecord of these hours and classifies them as 'unproductive hours', or unbilled hours. This is calculated as a percentage of revenue earning hours (4.5.. 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 Budget for the year 2021: The budget for the year 2021 was prepared in December 2020 and had the following components: Revenue: The revenue is calculated a number of hours that the crew works on a site, multiplied by the contracted rate with the client. The hours worked in the residential and commercial segments are shown separately and there is a total for the combined hours worked. The revenue for each segment is arrived st by multiplying the hours for the segment by the rate. The budget is prepared for four quarters, one to four. 1 2 3 For 2021, the budgeted sales hours were: Quarter Budgeted commercial sales in 3,700 hours Budgeted residential sales in hours 2,300 3,300 3,500 3,400 1,900 2,500 2,900 2 For 2021, the budgeted selling price per hours were: Quarter 1 Selling price per hour commercial $34 Selling price per hour (residential $42 3 $54 $54 $42 $42 Direct Labour expense: SFC will pay its employees an hourly rate of $23 for the entire year. Cleaning supply usage: The budgeted usage is 0.34 litre / labour hour for the commercial segment and 0.27 litre/labour hour for the residential segment. This is constant for the entire year. Cleaning supply expense: Budgeted expense is $6.40 per litre 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 $3.300 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 $7.500 per quarter and is the same for all four quarters. Covid related Budgeted expenditure on covid related overhead is $5,400 and is the same for all four quarters Employee Benefit related: Budgeted expenditure on employee benefit related overhead is $1,700 per quarter and is the same for an four quarters. Actual results for the year 2021. it is now January 7, 2022, and Sunflower Clean Services (SFCS) is comparing the actual expenses againsttheir budget. Here is what they found. Revenue: For 2021, the actual sales hours were: 2 3 Quarter Actual sales commercial Actual sales residential 3.100 3,600 3,300 3,500 2,400 2.100 2,100 2,600 For 2021, the actual hourly revenue was: 1 2 3 Quarter Actual selling price-commercial Actual selling price - residential $33 $53 $33 $33 $41 $41 $41 $41 Direct Labour expense: SFCS paid its employees an hourly rate of $22 for the entire year. Cleaning supply usage: The actual usage was 0.30litre / labour hour for the commercial segment and 0.25 litre/ labour hour for the residential segment. This was constant for the entire year. Cleaning supply expense: Actual expense was $6.30 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 per quarter was as follows: Quarter 1 2 3 Amount 3,100 3,100 3.100 3,100 Depreciation: This relates to the depreciation of vehicles uzed to transport employees to client locations. Actual expense was $8,000 per quarter and was the same for all four quarters Covid related: Actual expense per quarter was as follows: Quarter 1 2 3 Amount 7,000 7,100 3.800 6.000 4 Employee benefit related: Actual expense per quarter was as follows: Quarter 1 2 3 Amount 1,500 1,800 1,600 1,900 Unproductive (unbilled) factor: Cleaning crews had to work 7% over the revenue generating hours to attend to compisints and do second cleaning. These hours were not bilable to clients, but Sunflower Clean Services (SFCS) would paythe 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