There are two parts.

Part One 1. Prepare the companys payroll: The company employs 5 people: 1. Owner is paid $12.5 K/month 2. The project manager is paid $9.7 K/month 3. The construction assistant is paid $48.50/hour working average of 47 hours/week 4. Accountant is paid $55/hour working average of 43 hours/week 5. The estimator is paid $9.5K/month Include all the legal payroll burden BC regulation (EI and CPP) ignore WorkSafe for this exercise. 2. Use the information provided to prepare an overhead budget for a home building company for one year of operation. Payroll as per calculated in part 1 Sales cost budget is 0.1% of revenue budget The monthly insurance budget is calculated as: o 0.05% of revenues o 0.1% wages for hourly employees o 0.3% wages for salaried employees for general liability insurance The monthly budget for office utilities includes o Internet $280/month o Telephone $550/month o Hydro $85/month

o Cellphone $1,240/month The rent of the office is $10K/month Bank fees are $100/month Meals and coffee $400/month The expense for cleaning and janitorial is $750/month Vehicle expenses are $700/month Computer expenses $800/month Legal services $250/month Miscellaneous expenses $2,400/month

Part Two 1. List and describe some of the ways a company can increase its contribution margin 2. List and describe some of the ways a company can increase its profit margin 3. Discuss what are the advantages and disadvantages of raising profit margins 4. Discuss how specializing in a market segment can help improving a companys profitability 5. A construction company has total revenues of $5,798,000, total construction costs of $3,430,000, and general overhead costs of $107,000 for the year. Determine the companys total profit for the year and the percentage of the construction revenues that became profits. 6. Determine the break-even volume of work for a company with a fixed overhead of $98,000, a contribution margin ratio of 12.0%, and a required level of profit of $1,270,000. 7. Determine the break-even contribution margin ratio for a company with a fixed overhead of $134,000 and revenues of $1,798,000. 8. Determine the break-even contribution margin ratio for a company with a fixed overhead of $78,000, revenues of $6,700,000, and a required level of profit of $450,000

\begin{tabular}{|l|r|} \hline Month & Revenue \\ \hline January & $1,260,540 \\ \hline February & $2,248,500 \\ \hline March & $3,249,400 \\ \hline April & $1,253,450 \\ \hline May & $2,245,700 \\ \hline June & $1,245,540 \\ \hline July & $2,271,850 \\ \hline August & $2,243,140 \\ \hline September & $3,242,330 \\ \hline October & $3,245,050 \\ \hline November & $4,244,630 \\ \hline December & $1,262,900 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Month & Revenue \\ \hline January & $1,260,540 \\ \hline February & $2,248,500 \\ \hline March & $3,249,400 \\ \hline April & $1,253,450 \\ \hline May & $2,245,700 \\ \hline June & $1,245,540 \\ \hline July & $2,271,850 \\ \hline August & $2,243,140 \\ \hline September & $3,242,330 \\ \hline October & $3,245,050 \\ \hline November & $4,244,630 \\ \hline December & $1,262,900 \\ \hline \end{tabular}