WileyPLUS Kimmel, Accounting: Tools for Business Decision Making, 5e Help System

Question

WileyPLUS Kimmel, Accounting: Tools for Business Decision Making, 5e Help System Announcements ision Haking. e CALCULATOR Duncan Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2014, the following data are available 1. Sales: 20,000 units quarter 1; 23,000 units quarter 2 3. Fixed costs per quarter: sales salaries $10,700, office salaries $6,260, depreciation $4,500, insurance $1,740, utilities $910, and repairs expense $630 1% 4. Unit selling price: $24 Prepare a selling and administrative expense budget by quarters for the first 6 months of 2014. (List variable expenses before fixed expense.) DUNCAN COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2014 Quarter Six Months

Explanation / Answer

Duncan Company Selling & Administrative Expenses Budget Qtr 1 Qtr 2 Six Months Variable Costs 1 Sales Commission 24000 20000*24*5% 27600 23000*24*5% 51600 Delivery Expenses 9600 20000*24*2% 11040 23000*24*2% 20640 Advertising 19200 20000*24*4% 22080 23000*24*4% 41280 Total Variable Cost 52800 60720 113520 Fixed Costs Salaries 10700 10700 21400 Office Salaries 6260 6260 12520 Depreciation 4500 4500 9000 Insurance 1740 1740 3480 Utilities 910 910 1820 Repair Expenses 630 630 1260 Total Fixed Costs 24740 24740 49480 Total Selling & Admin Costs 77540 85460 163000

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