Valquez Manufacturing Company combines its operating expenses for budget purpose
ID: 2537893 • Letter: V
Question
Valquez Manufacturing Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first quarter of 2016, the following data are developed:
1. Sales: 20,000 units; unit selling price: $35
2. Variable costs per dollar of sales:
Sales commissions 6%
Delivery expense 2%
Advertising 4%
3. Fixed costs per quarter:
Sales salaries $24,000
Office salaries 17,000
Depreciation 5,000
Insurance 1,000
Utilities 2,000
Instructions
Prepare a selling and administrative expense budget for the first quarter of 2016.
Explanation / Answer
Valquez Manufacturing Company Selling & Administrative Expense Budget For the First Quarter of 2016 Amount Variable Costs: Sales Commission - $700,000 X 6% 42,000.00 Delivery Expense - $700,000 X 2% 14,000.00 Advertising - $700,000 X 4% 28,000.00 Total Variable Selling & Administrative Expense 84,000.00 Fixed Costs: Sales Salaries 24,000.00 Office Salaries 17,000.00 Depreciation 5,000.00 Insurance 1,000.00 Utilities 2,000.00 Total Fixed Selling & Administrative Expense 49,000.00 Total Selling & Administrative Expense 133,000.00
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.