Flexible Budget for Selling and Administrative Expenses for a Service Company Cl
ID: 2521640 • Letter: F
Question
Flexible Budget for Selling and Administrative Expenses for a Service Company
Cloud Productivity Inc. uses flexible budgets that are based on the following data:
Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)
Sales commissions 14% of sales Advertising expense 18% of sales Miscellaneous administrative expense $6,500 per month plus 12% of sales Office salaries expense $30,000 per month Customer support expenses $12,000 per month plus 20% of sales Research and development expense $32,000 per monthExplanation / Answer
Cloud Productivity Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending March 31 Total sales $400,000 $500,000 $600,000 Variable cost: Sales commissions $56,000 $70,000 $84,000 Advertising expense $72,000 $90,000 $108,000 Miscellaneous administrative expense $48,000 $60,000 $72,000 Customer support expenses $80,000 $100,000 $120,000 Total variable cost $256,000 $320,000 $384,000 Fixed cost: Miscellaneous administrative expense 6500 6500 6500 Office salaries expense 30000 30000 30000 Customer support expenses 12000 12000 12000 Research and development expense 32000 32000 32000 Total fixed cost 80500 80500 80500 Total selling and administrative expenses $336,500 $400,500 $464,500
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.