What is the budgeted total direct cost for January 20x4? (Use the following data

Question

What is the budgeted total direct cost for January 20x4? (Use the following data to answer this question.) 20X4 ANNUAL BUDGET PERCENT 100 AMOUNT $1,000,000 EARNINGS COST OF CONSTRUCTION LABOR MATERIALS SUBCONTRACTS 250,000 450,000 50,000 750,000 250,000 25 45 TOTAL DIRECT COST GROSS MARGIN VARIABLE OPER. EXPENSE 75 25 AUTO AND TRUCK INDIRECT LABOR 20,000 30,000 50,000 2 3 5 TOTAL VARIABLE OPER. EXP FIXED OPER. EXPENSE 12,000 99,600 38,400 150,000 200,000 $50,000 DEPRECIATION RENT OTHER TOTAL FIXED OPER. EXPENSE TOTAL OPER. EXPENSE NET PROFIT

Explanation / Answer

As given in the question ,Jan sales constitute only 4 % of the annual amount.

Annual earnings =1,000,000

Jan earnings = .04 * 1,000,000=40,000

Direct cost=75% of earnings=.75 * 40000=30000

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