From the course: Accounting Foundations: Budgeting

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Supplies and labor budget example for a service firm

Supplies and labor budget example for a service firm

From the course: Accounting Foundations: Budgeting

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Supplies and labor budget example for a service firm

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- Most service businesses need supplies to operate. For restaurants, supplies include the food used in preparing meals, cleaning materials, and the paper goods needed in the office for menus and customer invoices. For medical doctors, supplies might include needles, tape, and bandages, as well as office supplies. For Boulder View Inn, supplies include soap and shampoo for the guest rooms, as well as donuts, cereal, juice, and milk for the continental breakfast. The supplies budget for Boulder View Inn is shown here. You can see that the cost of supplies varies depending on the number of rooms rented each quarter. Let's work through the first quarter together. Remember that the total number of room rental nights in the slow first quarter is expected to be 270. The total cost of supplies for each room is $11 per room, per night, the sum of the cost for the bathroom items, the laundry cost, and the continental breakfast cost. Now, we know what to expect in terms of supplies cost for each…

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