Last month, Widner Corporation generated sales of $800,000 and incurred selling

Question

Last month, Widner Corporation generated sales of $800,000 and incurred selling and administrative expenses of $320,000, half of which were variable. This month, the company estimates that it will generate sales of $900,000. Management does not anticipate any changes in unit variable costs. However, it does expect fixed selling and administrative costs to increase by $5,000.


Compute Widner's total selling and administrative expense budget for the upcoming month. (Omit the "$" sign in your response.)

Total expense $

Explanation / Answer

half of selling & admin is variable: 320,000*.5 = 160,000 variable. 160,000 is fixed. to find out how much variable on $900,000 in sales: 160,000*900,000/800,000 = $180,000 total admin and selling: 180,000 variable 160,000 fixed 5,000 increase in fixed = $345,000 answer: $345,000

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