Question Help Kapital Inc. has prepared the operating budget for the first quart

Question

Question Help Kapital Inc. has prepared the operating budget for the first quarter of 2015. They forecast sales of $45,000 in January, $55,000 in February, and $65,000 in March. Variable and fixed expenses are as follows: Variable: Power cost (30% of Sales) Miscellaneous expenses: (10% of Sales) Fixed: Salary expense: $6,000 per month Rent expense: $5,000 per month Depreciation expense: $1,400 per month Power cost/fixed portion: $600 per month Miscellaneous expenses/fxed portion: $1,000 per month Calculate total selling and administrative expenses for the month of January. $32,000 0 B. $40,000 O C. $18.000 OD $36,000

Explanation / Answer

Answer A. $32,000 Variable: Power Cost - $45,000 X 30%    13,500.00 Misc. Expenses - $45,000 X 10%      4,500.00    18,000.00 Fixed: Salary Expense      6,000.00 Rent Expense      5,000.00 Depreciation Expense      1,400.00 Power Cost          600.00 Misc. Expenses      1,000.00    14,000.00 Total Selling & Administration Expense    32,000.00

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