Exercise 7-6 Selling and Administrative Expense Budget [L07-7] The budgeted unit

Question

Exercise 7-6 Selling and Administrative Expense Budget [L07-7] The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below: 1st Quarter 21,000 2nd Quarter 28,000 3rd Quarter 19,000 4th Quarter 19,000 Budgeted unit sales The company's variable selling and administrative expense per unit is $2.00. Fixed selling and administrative expenses include advertising expenses of $14,000 per quarter, executive salaries of $41,000 per quarter, and depreciation of $20,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and S5,000 in the third quarter. Finally, property taxes of $8,400 will be paid in the second quarter. Required: Prepare the company's selling and administrative expense budget for the upcoming fiscal year. (Round Variable cost" answers to 2 decimal places.) Weller Company Selling and Administrative Expense Budget 1st Quarter 2nd Quarter 3rd Quarter 4th QuarterYear Fixed selling and administrative expenses: Total fixed selling and administrative expenses Total selling and administrative expenses Cash disbursements for selling and administrative expenses

Explanation / Answer

1st quarter 2nd quarter 3rd quarter 4th quarter Year Budgeted unit sales 21000 28000 19000 19000 87000 Variable selling and admin. Expense per unit 2 2 2 2 2 Total Variable expenses 42000 56000 38000 38000 174000 Fxed selling and admin expense: Advertising 14000 14000 14000 14000 56000 Executive Salaries 41000 41000 41000 41000 164000 Insurance 5000 0 5000 0 10000 Property taxes 0 8400 0 0 8400 Depreciation 20000 20000 20000 20000 80000 Total Fixed selling and admin expenses 80000 83400 80000 75000 318400 Total selling and administrative expenses 122000 139400 118000 113000 492400 Less depreciation 20000 20000 20000 20000 80000 Cash disbursements for selling and administrative expenses 102000 119400 98000 93000 412400

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