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Sims is the budget director for Walker House, Inc., a multinational company based in Maryland. Walker House,
Inc., organizes and coordinates art shows and auctions throughout the
world. Budgeted and actual costs and
expenses for 2015 are compared in the following schedule.
items Budget Actual
Salaries expense, staging $480,000 $512,800
Salaries expense, executive 380,000 447,200
Travel costs 640,000 652,020
Auctioneer services 540,000 449,820
Space rental costs 251,000 246,580
Printing costs 192,000 182,500
Advertising expense 169,000 183,280
Insurance, merchandise 84,800 77,300
Insurance, liability 64,000 67,100
Home office costs 209,200 219,880
Shipping costs 105,000 112,560
Miscellaneous 25,000 25,828
Total expenses $3,140,000 $3,176,868
Net sales $6,200,000 $6,369,200
For 2016, the following fixed
costs have been budgeted: executive salaries, $440,000; advertising expense,
$190,000; merchandise insurance, $80,000; and liability insurance,
$68,000. Additional information follows.
sales are expected to be $6,400,000 in 2016.
expenses for staging will increase 20 percent over actual figures for 2015.
costs are expected to be 11 percent of net sales.
services will be billed at 9.5 percent of net sales.
rental costs will go up 20 percent from 2015 budgeted amounts.
costs are expected to be $190,000 in 2016.
costs are expected to rise 20 percent over 2015 budgeted amounts.
expenses for 2016 will be budgeted at $28,000.
office costs are budgeted for $230,000 for 2016.
the company’s budgeted income statement for 2016.
the budget director be worried about the trend in the company’s operations? Be