E9-9 Edington Company combines its operating expenses for budget purposes in a s
ID: 2428529 • Letter: E
Question
E9-9Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2008, the following data are available.
Sales: 20,000 units quarter 1; 22,000 units quarter 2.
Variable costs per dollar of sales: Sales commissions 5%, delivery expense 2%, and advertising 3%.
Fixed costs per quarter: Sales salaries $10,000, office salaries $6,000, depreciation $4,200, insurance $1,500, utilities $800, and repairs expense $600.
Unit selling price: $20.
Prepare a selling and administrative expense budget by quarters for the first 6 months of 2008. (List amounts from largest to smallest eg 10, 5, 3, 2.)
EDINGTON COMPANY
Selling and Administrative Expense Budget
For the Six Months Ending June 30, 2008
Quarter
Six
1
2
Months
Budgeted sales in units
Variable expenses
DepreciationDelivery expensesAdvertisingInsuranceSales salariesRepairs expensesSales commissionsUtilitiesOffice salaries $ $ $
Delivery expensesOffice salariesDepreciationSales commissionsSales salariesInsuranceUtilitiesRepairs expensesAdvertising
DepreciationInsuranceUtilitiesAdvertisingSales commissionsDelivery expensesSales salariesRepairs expensesOffice salaries
Total variable
Fixed expenses
Office salariesSales commissionsDelivery expensesAdvertisingSales salariesDepreciationInsuranceUtilitiesRepairs expenses
Repairs expensesAdvertisingDepreciationOffice salariesSales commissionsUtilitiesDelivery expensesSales salariesInsurance
InsuranceUtilitiesSales commissionsAdvertisingDepreciationRepairs expensesDelivery expensesSales salariesOffice salaries
Sales commissionsDepreciationInsuranceSales salariesUtilitiesAdvertisingRepairs expensesOffice salariesDelivery expenses
Repairs expensesDepreciationUtilitiesSales commissionsDelivery expensesSales salariesAdvertisingOffice salariesInsurance
Delivery expensesSales commissionsSales salariesRepairs expensesInsuranceUtilitiesOffice salariesAdvertisingDepreciation
Total fixed
Total selling and administrative expenses $
$
$
Click here if you would like to Show Work for this question
Question Attempts: 0 of 3 used
Copyright © 2000-2011 by John Wiley & Sons, Inc. or related companies. All rights reserved.
Explanation / Answer
EDINGTON COMPANY
Selling and Administrative Expenses Budget
For the Six months Ending June 30, 2008.
Quarter - 1
Quarter - 2
For 6 Months
EDINGTON COMPANY
Selling and Administrative Expenses Budget
For the Six months Ending June 30, 2008.
Quarter - 1
Quarter - 2
For 6 Months
Sales Units 20000 22000 42000 Sales ($20 * units) - (A) $400,000 $440,000 $840,000 Variable Costs: Sales Commission (Sales * 5%) 20000 22000 42000 Advertising (Sales * 3%) 12000 13200 25200 Delivery Expenses (Sales * 2%) 8000 8800 16800 Total Variable Costs: - (B) $40,000 $44,000 $84,000 Fixed Costs: Sales Salaries 10000 10000 20000 Office Salaries 6000 6000 12000 Depreciation 4200 4200 8400 Insurance 1500 1500 3000 Utilities 800 800 1600 Repairs 600 600 1200 Total Fixed Costs: - (C) $23,100 $23,100 $46,200 Total Cost: D = (B + C) $63,100 $67,100 $130,200 Income - (A - D) $336,900 $372,900 $709,800Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.