The budgeted unit sales of Harson Company for the upcoming fiscal year are provi

Question

The budgeted unit sales of Harson Company for the upcoming fiscal year are provided below: The company's variable selling and administrative expenses per unit are $2.75. Fixed selling and administrative expenses include advertising expenses of $12,000 per quarter, executive salaries of $40,000 per quarter, and depreciation of $16,000 per quarter. In addition, the company will make insurance payments of $6,000 in the 2^nd quarter and $6,000 in the 4^th quarter. Finally, property taxes of $6,000 will be paid in the 3^rd quarter. Required: Prepare the company's selling and administrative expense budget for the upcoming fiscal year.

Explanation / Answer

Selling and administrative expense budget

Particulars 1 2 3 4 Year Budgeted unit sales 12000 14000 11000 10000 47000 Variable cost at 2.75 per unit 33000 38500 30250 27500 129250 Fixed cost Advertisement 12000 12000 12000 12000 48000 salary 40000 40000 40000 40000 160000 depreciation 16000 16000 16000 16000 64000 Insurance 6000 6000 12000 Property Tax 6000 6000 Total Fixed exp 68000 74000 74000 74000 290000 Total Variable + fixed exp 101000 112500 104250 101500 419250

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