The annual costs for the maintenance department for 2017 indicated that the supervisor's salary and benefit package was $40,000 and that $130,000 had been spent in hourly wages. Equipment depreciation that year was $2,000. Additionally, $8,000 was spent on various consumable supplies that the maintenance department used in their tasks. There were 500 maintenance orders in 2017. For 2008, the supervisor was given a 3% raise. At the beginning of 2008, we expected to have 50 more maintenance requests.
a) Prepare a budget for 2018 and confirm that the total maintenance budget (total expenditures) should be increased to $195,000.
b) It is now the end of 2018 and the data shown below has been gathered on actual costs. There were 600 maintenance requests during the year. Conduct a variance analysis by comparing actual, variable and master (static) budget.
Supervisor's salary and benefits $ 37,500
Hourly worker wages 153,000
Depreciation 2,400
Consumable supplies 10,800
Total expenditures $203,700
