Brookings Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.??Fixed Element per MonthVariable Element per Well Serviced?Revenue?$4,500?Employee salaries and wages$48,100$1,000?Servicing materials?$600?Other expenses$38,700?When the company prepared its planning budget at the beginning of August, it assumed that 34 wells would have been serviced.Required:Prepare the company's planning budget for August.
What will be an ideal response?
| ? | ? | Planning Budget |
| ? | Wells serviced (q) | 34 |
| ? | Revenue ($4,500q) | $153,000 |
| ? | Expenses: | ? |
| ? | Employee salaries and wages ($48,100 + $1,000q) | 82,100 |
| ? | Servicing materials ($600q) | 20,400 |
| ? | Other expenses ($38,700) | 38,700 |
| ? | Total expenses | 141,200 |
| ? | Net operating income | $11,800 |
Business
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