The Year 1 selling expense budget for Apple Corporation is as follows: Budgeted

Question

The Year 1 selling expense budget for Apple Corporation is as follows:

Budgeted sales

$275,000

Selling costs:

Delivery expenses

$ 2,750

Commission expenses

5,500

Advertising expenses

2,500

Office expenses

1,500

Miscellaneous expenses

5,300

Total

$ 17,550

Delivery and commission expenses vary proportionally with budgeted sales in dollars. Advertising and office expenses are fixed. Miscellaneous expenses include $2,000 of fixed costs. The rest varies with budgeted sales in dollars. The budgeted sales for Year 2 are $330,000.

What will be the value of miscellaneous expenses in the Year 2 selling expense budget?

Select one:

A. $6,200

B. $4,200

C. $3,600

D. $3,960

Budgeted sales

$275,000

Selling costs:

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Year 1 Year 2 Budgeted sales        275,000.00        330,000.00 Selling costs: Delivery expenses             2,750.00             3,300.00 Commission expenses             5,500.00             6,600.00 Advertising expenses             2,500.00             2,500.00 Office expenses             1,500.00             1,500.00 Miscellaneous expenses             5,300.00             5,960.00 Total           17,550.00           19,860.00 Miscellaneous expenses in the Year 2 selling expense budget Fixed part             2,000.00 Variable part= (5300 -2000)/275,000 * 330,000             3,960.00 Total = Variable + fixed             5,960.00 In the options 5,960 is not given . Instead 3,960 is given which are variable. Thus answer would be D $3,960

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