PROJECT

Project consists of a second report from Martine to Gretel, the president of Holzmann Cleaning Services (HCS).

1. Prepare a 20X7 operating budget for both commercial and residential operations, based on the details provided in Exhibit 4 in Project Details. The operating budget will require adjustments to the activity-based analysis provided in requirement 2 of Project 1. Indirect general costs should be allocated 60% to commercial and 40% to residential.

Provide a discussion of the results in your report.

2.
a) Revise the 20X7 operating budget statements to a contribution format. Assume that the following are variable costs:
i. Wages and benefits
ii. Cleaning supplies
iii. Transportation costs

All remaining costs are fixed.

Based on the 20X7 budget:

b) Calculate the break-even point in sales dollars based on the 20X7 sales mix.

c) Calculate the sales revenue required to achieve a 25% profit margin.

d) Provide comments on the results in the report. Your discussion should include comments on the margin of safety and the limits of this analysis as it pertains to HCS.

3. To assist Gretel in submitting bids for new work, use the 20X7 budget to prepare an average markup on variable cost analysis for both commercial and residential cleaning services. Using the markup percentages, calculate the sales price of a typical commercial and residential contract (see Exhibit 5 in Project Details). Also provide a short discussion of the results in your report.

4. Cash analysis:

a) Prepare a cash budget for the quarter starting July 20X6 using the information in Exhibit 6 in Project Details.

b) Prepare a discussion that highlights your findings in your report. What advice can you give Gretel regarding the handling of cash and her operations during this period?

Attachment:- Project Details.rar