Question 8 What is the budgeted ratio of material to earnings? (Use theolowing data to answer this question) 10,000,000 100.0 600,000 16 4,000,000 40 00,000 32.00 200,000 000,000 90.00 Total Direct Cost Gross Profi ,000,000 10.00 Auto and Truck 150,000 1.50 Interest (Work in Insurance (Work n 100,000 37.000 2.37 1.00 0,000 567,0005.67 3,0000.03 Insurance ( Interest 20,0000.20 44,000 300,0003.00 0,000 0.10 483,000 4.83 1,050,000 10.50 Other F Total Fixed Net Profit (before Other Budget Data for 2016: 1. 2. The owners expect a minimum return on m vestment (before tax) of 27.78% for 2016. Anticipated increase in fixed operating expense includes $1,000 to contribution, $2,000 to rent, $5,000 to auto and truck insurance,$45,000 to salaries, and $2,000 to other fixed cost Material cost is expected to decrease as vendors try to liquidate stock built during the earlier construction boom. The cost decrease should result in a decrease in relationship to revenue in the amount of 3% 3. . Subcontract costs should also decrease as subcontractors scramble for work. The expected decrease in relationship to revenue is 2%. No other changes to cost structure 5. o 4296 37% 43%