You have been running a construction company out of your home with your spouse.

Question

You have been running a construction company out of your home with your spouse. The company has grown well and begun to take up too much time of you and your spouse. Therefore, the company made a decision to hire a part-time estimator and a full-time office manager at the rented office. The duty of an office manager will include accounting, receptionist, and secretarial duties. Determine a general overhead cost of your company as assuming today is December, 23. Please use a pre- fomatted excel spreadsheet as attached and submit your work through Blackboard. Additionally, please fill out highlighted blank cells to get whole credits. Estimated wages for you and your spouse including burdens are: The owner (you): S 90,000 Your spouse: $ 45,000 . Other items Estimator's Wage Office Manager's Wage Social Security tax Medical Tax Federal unem State unemploymentt Worker's compensation insurance General Liability Insurance Retirement Plan (401K) Health Insurance VacatioSickHolida S16hr for 20 hrs/week S13/hr for 40 hrs/week 6.2% of w 1.45% of w 0.8% of 2.0% of wages up to $9,000 S1.25 per S100 of wage 0.67% of wages 50% of match up to 6% of wages S150 month 10 days up to $97,500 tax (FUTA ax to $7,000 1,200 sf. Preferred office size: Calculated interest expense for the year: $1,200 Charitable contribution on December Advertising: Office supplies; Office rent: Office utility: Bank fees: Allowance for miscellaneous expenses $100 per month There are 52 weeks per year $3,000 1 % of revenues $300 per month 12 per square foot per year 0.27 per square foot per month $50 per month revenues of the coming year. $2,460,000 The company needs to pay $100 for a business license renewal on next January

Explanation / Answer

No of week per year 52 Preffered office size (sq.ft.) 1200 Expected revenues 2460000 Unit Rates/ Formula Estimator Manager Wages Base wage $/year $16*20hr*52 weeks 16640 $/year $13*40hr*52 weeks 27040 Burden Social Security tax $/year 6.2% of wages 1031.68 1676.48 Medical tax $/year 1.45% of wages 241.28 392.08 FUTA $/year 0.8% of wages 56 56 SUTA $/year 2% of wages 180 180 Workmen compensation Insurance $/year 1.25 per 100 of wages 208 338 General liabilties Insurance $/year 0.67% of wages 111.488 181.168 Retirement Plan $/year 50% of match upto 6% of wages 499.2 811.2 Health Insurance $/year 150/ per month 1800 1800 Total wages and burden 20767.648 32474.928 Total wages and burden for you 90000 Total wages and burden for your spouse 45000 Other General overheads Rates/ Formula Yearly Costs Interest 1200 Charitable contribution 3000 Advertising 1 % of revenue 24600 Office Supplies 300/- per month 3600 Office Rent 12/- sq ft per year 14400 Office Rent 0.27/- sq ft per month 3888 Bank Fee 50/ per month 600 Allowance 100/ per month 1200 Total General overheads 52488

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