Part B

Pretty Me Limited is a beauty therapy company which specializes in beauty care services.

The firm employs 8 beauticians who work throughout the year but are given paid leave as follows: 10 days of annual leave, and 5 days of sick leave. Staff work 8 hours a day, 5 days a week.

Pretty Me offers the following services: pedicure, manicure and facial. 2 staff specialize in pedicure, 2 staff specialize in manicure and 4 staff specialize in facial services.

Pedicure is charged at $15 an hour. Manicure is charged at $20 an hour. Facial is charged at $25 an hour.

The service charge rates are based on 120% mark-up on the labour rate cost.

For the following year, the company projects to hire 2 additional staff, one each for pedicure and manicure. Labour rate is projected to increase by 15% with no change in service charge rate.

Required:

a) Calculate the service fees budget for the following year

b) Calculate the labour cost budget for the following year

c) Prepare the Budgeted Gross Profit Statement