Skeete Inc. bases its selling and administrative expense budget on the number of

Question

Skeete Inc. bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $1.70 per unit. The budgeted fixed selling and administrative expense is $57,720 per month, which includes depreciation of $9,360. The remainder of the fixed selling and administrative expense represents current cash flows. The sales budget shows 3,900 units are planned to be sold in November. Required: Prepare the selling and administrative expense budget for November.

Explanation / Answer

Selling and administrative expense budget on november :

November Sales unit 3900 Variable selling and administrative expense (3900*1.7) 6630 Fixed selling and administrative expense 57720 Total selling and administrative expense 64350 Less: Depreciation -9360 Cash disbursement on selling and administrative expense 54990

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