each visor requires E8-9 Preparing Selling and Administrative Expense Budget LO
ID: 2553583 • Letter: E
Question
each visor requires E8-9 Preparing Selling and Administrative Expense Budget LO 8-3g Each visor requires a total of $3.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.50 each. Shadee wants to have 32 closures on hand on May 1, 23 closures on May 31, and 22 closures on June 30. Additionally, Shadee's fixed manufacturing overhead is $1,400 per month, and variable manufacturing overhead is $2.50 per unit produced. Each visor takes 0.60 direct labor hours to produce and Shadee pays its workers $7 per hour Additional information: Selling costs are expected to be 7 percent of sales . Fixed administrative expenses per month total $1,200 Required: Determine Shadee's budgeted selling and administrative expenses for May and June. (Do not round your intermediate calculations. Round your answers to 2 decimal places.) May June Budgeted Selling and Administrative Expenses References eBook & Resources WorksheetExplanation / Answer
Solution:
You can calculate the Budgeted Selling and Administrative Expense by using the below table:
May
June
Selling Cost (11% of Sales) (Refer Note)
Fixed Administrative Expense
$1,400
$1,400
Total Budgeted Selling and administrative Expenses
(Total of Selling Cost and Fixed Administrative Expense)
Note ---
Sales Revenue data is not mentioned in the question. It means Selling Cost which is 11% of sales cannot be workout. If you know the sales revenue in May and June, please let me know so that I will provide you correct answer otherwise you can calculate yourself as follows:
Selling Cost for May = Sales Revenue of May x 11% =
Selling Cost for June = Sales Revenue of June x 11% =
May
June
Selling Cost (11% of Sales) (Refer Note)
Fixed Administrative Expense
$1,400
$1,400
Total Budgeted Selling and administrative Expenses
(Total of Selling Cost and Fixed Administrative Expense)
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