The selling and administrative expense budget of Cubist Pharmaceuticals Corporat

Question

The selling and administrative expense budget of Cubist Pharmaceuticals Corporation is based on the number of units sold, which are budgeted to be 2,500 units in January. The variable selling and administrative expense is $4.40 per unit. The budgeted fixed selling and administrative expense is $35,750 per month, which includes depreciation of $4,000. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expense for the month of January is:

Explanation / Answer

Cash disbursements for variable expenses(2500*4.4) 11000 Add:Cash disbursements for fixed expenses(35750-4000) 31750 Total Cash disbursements for $42750(A).

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