Question Two: The budgeted unit sales of Harson Company for the upcoming fiscal

Question

Question Two:
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 2nd quarter and $6,000 in the 4th quarter. Finally, property taxes of $6,000 will be paid in the 3rd quarter.
Required:
Prepare the company’s selling and administrative expense budget for the upcoming fiscal year.

Explanation / Answer

Selling & Administrative Expense Budget Quarter 1 2 3 4 Total Units to be sold          12,000          14,000          11,000          10,000            47,000 Variable Selling & Adm Exp per unit                    3                    3                    3                    3                    11 Total Variable Expense          33,000          38,500          30,250          27,500          129,250 Fixed Selling & Administrative Expense                     -   Advertising Expense          12,000          12,000          12,000          12,000            48,000 Executive Salaries          40,000          40,000          40,000          40,000          160,000 Insurance payments            6,000            6,000            12,000 Property Taxes            6,000              6,000 Total Selling & Administrative Expense estimated          85,000          96,500          88,250          85,500          355,250

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