Exercise 8-6 Selling and Administrative Expense Budget [LO8-7] The company’s var

Question

Exercise 8-6 Selling and Administrative Expense Budget [LO8-7]

The company’s variable selling and administrative expense per unit is $1.90. Fixed selling and administrative expenses include advertising expenses of $13,000 per quarter, executive salaries of $38,000 per quarter, and depreciation of $19,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $7,200 will be paid in the second quarter.

Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Variable cost" answers to 2 decimal places.)

Explanation / Answer

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Budgeted unit sales 20000 26000 19000 18000 83000 Variable expenses per unit 1.9 1.9 1.9 1.9 Variable selling and administrative expenses 38000 49400 36100 34200 157700 Fixed selling and administrative expenses: Advertising expenses 13000 13000 13000 13000 52000 Executive salaries 38000 38000 38000 38000 152000 Depreciation 19000 19000 19000 19000 76000 Insurance 4000 4000 Property taxes 7200 Total Fixed selling and administrative expenses 74000 77200 74000 70000 280000 Total selling and administrative expenses 112000 126600 110100 104200 437700 Cash disbursement for selling and administrative expenses* 93000 107600 91100 85200 361700 *This shall exclude depreciation since it is a non cash expense

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.