The Tub in Your Home Company (TIYHC) builds the highest quality bathrooms in the homebuilding business. TIHYC is a subcontractor that usually works underneath the general contractor. TIYHC constructs bathrooms components purchased outside. The costs (value) added by TIYHC are indirect costs (which include assembly labor), storage, and transportation. TIYHC constructs two types of bathrooms: standard and deluxe. The cost behavior of TIYHC is as follows:

Fixed Variable

Purchased Components

Deluxe bathroom $800 per component

Standard bathroom $400 per component

Indirect Costs $40,000 $16 per component

Storage $ 8,000 $4 per bathroom

Transportation $ 8,000 2 per bathroom

Both the standard and deluxe bathrooms require 5 components: toilets, bathtubs, sinks, showers, and cabinets. Therefore, the total cost of deluxe bathrooms is $4,000 and total cost of standard bathrooms is $2,000. TYHC uses a six-month continuous budget that is revised monthly. Sales forecasts for the next eight months are as follows:

Deluxe Standard

October 320 bathrooms 400 bathrooms

November 240 300

December 560 700

January 320 400

February 320 400

March 240 300

April 240 300

May 280 350

Using Excel prepare a table of budgeting information and an operating expense budget for TYHC for October through March. Incorporate the expectation that sales of the standard bathrooms will be 125% of deluxe bathrooms. Prepare a spreadsheet that can be revised easily for succeeding months.