Olympic Wash is owned by Bob, who oversees the entire operation, also handles sales and marketing and works to prepare the 2013 budget with his company controller Christy Smith. They offer three different types of car washes: Bronze for $8, Silver for $12, and Gold for $21. Each wash includes different services.

Christy reported that the sales for 2012 were 9,400 washes of Bronze, 8,000 washes of Silver, and 6,700 of Gold. After every car wash each customer is given a card and is encouraged to respond to the short customer satisfaction survey about the service they received. Bob strives to maintain at least a 94% customer satisfaction rating and at the end of every year rewards his employees with a $100 bonus for ever percentage above 94% in comparison to the total customer satisfaction rating for the year.

They came to the conclusion that through a 10% increase in advertisement (PY $2,300) and encouragement they would see a growth in Silver by 15% and growth in Gold by 10%, with decrease of 10% in Bronze. With this increase in sales and time it takes to perform the higher level car washes, they figured they would have to hire an additional employee to help assist in the washing.

Some facts to consider for 2013: Salary and bonuses for the Bob and Christy are set at $95,000 plus a 5% bonus on any profit made. Discounts are calculated at 2% of gross sales. Direct material costs for per wash for 2012 for Bronze washes = $2, Silver = $3, and Gold =$5. For 2013 they anticipate that Direct Material costs per wash will remain the same. Car wash employees have wages of $8/hour plus any tips received. There are currently 6 car wash employees in which it is anticipated that each employee will work for a total of 2,000 hours a year (40 hour weeks with one week vacation and one week of sick time unpaid). After every 100 car washes hose valves have to be changed. These valves cost $8 to replace. Anticipating a customer satisfaction rating of 96%.

Yearly rent = $10,000 Insurance Premium = $3,000 Depreciation = $3,000 Miscellaneous Expenses = $1,600 Utilities Expense = $3,400 Other Operating Expense = 2% of Gross Sales

Assist Bob and Christy in preparing the operating budget for 2013. Please include calculations.

Olympic Wash (A)
OPERATING BUDGET 2013
	Budget 2013		Sales Budget Worksheet:
Unit Count (Washes)				Bronze	Silver	Gold	Budget Totals
Gross Sales			Total Units (2012)	2	3	5
(Less) Discounts-Coupons			Budget Increase (decrease)
Net Sales			Budget-2013
Materials			Average Price
Labor			Budget Gross Sales by Type
Values			Less-Ave. Discount-Coupons
Other Oper Expenses			Budget Net Sales by Type
Gross Profit			Net Ave. Price
Advertising
Rent			Cost Budget Worksheet:
Insurance			Material
Depreciation			Other Operating Expenses
Miscellaneous			Advertising (PY 2,300)
Utilities (Non-Operating)			Valves
Salaries Mngmt			Labor:
Total Expenses			Number of Employees
Profit before Bonus			Number of Hours, Each
Management Bonus			Total Hours
Employee Bonus			Rate
Profit			Total Labor Cost