Problem 4 Preparing an overhead budget and another expenses budget

Chip and Joanna budgeted overhead and other expenses as follows for the year ended December 31, 2015:

Overhead:

Depreciation-equipment................................................................................................... $ 60,000

Depreciation-building........................................................................................................ 135,000

Fringe benefits.................................................................................................................. 385,000

Photocopying.................................................................................................................... 95,000

Secretarial support............................................................................................................ 465,000

Telephone/fax................................................................................................................... 115,000

Utilities............................................................................................................................... 193,000

Other direct expenses:

Travel................................................................................................................................ $123,000

Meals 37,000

Required:

1.Prepare an Overhead budget.

2.Prepare an Other Expenses budget.

Problem 5 Preparing a budgeted income statement

Here is additional information available to Chip and Joanna:

Professional Labor Hours

Partners................................................................................................................................ 4,000

Associates............................................................................................................................. 14,000

Staff...................................................................................................................................... 22,000

Partners have a billing rate of $225 per hour and actually earn $110 per hour.

Associates bill out at $140 per hour and earn $85 per hour.

Staff bill out at a rate of $75 per hour and earn $35 per hour.

Required:

Combine the information from Problem 4 with this additional information and prepare a budgeted income statement for the year ended December 31, 2015.

1.

Chip and Joanna

Overhead Budget

For the Year Ended December 31, 2015

Secretarial support

Fringe benefits

Utilities

Depreciation -- building

Telephone/fax

Photocopying

Depreciation -- equipment

Total

Chip and Joanna

Other Direct Expenses Budget

For the Year Ended December 31, 2015

Travel

Meals Total

Problem 9-5
Chip and Joanna
Budgeted Income Statement
For the Year Ended December 31, 2015
Revenues
Operating costs:
Professional labor
Overhead support
Other expenses
Operating income