Scotch inc has prepared the operating budget for the first quarter of the year .

Question

Scotch inc has prepared the operating budget for the first quarter of the year . The company forecast sales of $50000 in January , $60000 in February, and $70000 in March. Variable and fixed expense are as follows:
Variable expenses: Power cost (20% of sales) Miscellaneous expense: (10% of sales )
Fixed expenses: Salaries expense: $6000 per month Rent expense: $5000 per month Depreciation expense: $1200 Power cost/ fixed portion: $500 per month Miscellaneous expenses/ fixed portion: $1000 per month
Using this information above, calculate the amount of selling and administrative expenses for the month of February. Scotch inc has prepared the operating budget for the first quarter of the year . The company forecast sales of $50000 in January , $60000 in February, and $70000 in March. Variable and fixed expense are as follows:
Variable expenses: Power cost (20% of sales) Miscellaneous expense: (10% of sales )
Fixed expenses: Salaries expense: $6000 per month Rent expense: $5000 per month Depreciation expense: $1200 Power cost/ fixed portion: $500 per month Miscellaneous expenses/ fixed portion: $1000 per month
Using this information above, calculate the amount of selling and administrative expenses for the month of February.
Variable expenses: Power cost (20% of sales) Miscellaneous expense: (10% of sales )
Fixed expenses: Salaries expense: $6000 per month Rent expense: $5000 per month Depreciation expense: $1200 Power cost/ fixed portion: $500 per month Miscellaneous expenses/ fixed portion: $1000 per month
Using this information above, calculate the amount of selling and administrative expenses for the month of February.

Explanation / Answer

For the month of Feb Sales 60000 Variable Expenses Power Cost@20% 12000 60000*20% Misc Expenses@10% 6000 60000*10% Total variable Expenses 18000 (12000+6000) Fixed Expenses Salaries Expenses 6000 Rent Expense 5000 Depreciation Expense 1200 Power Cost Fixed 500 Misc Expenses Fixed 1000 Total Fixed Expenses 13700 (6000+5000+1200+500+1000) Total Selling and Admin Expenses 31700 (18000+13700)

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