Kirkland Company combines its operating expenses for budget purposes in a sellin

Question

Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2017, the following data are available.

1. Sales: 20,600 units quarter 1; 22,100 units quarter 2. 2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%. 3. Fixed costs per quarter: sales salaries $10,000, office salaries $6,130, depreciation $4,760, insurance $2,010, utilities $820, and repairs expense $610. 4. Unit selling price: $21. Selling and Administrative Expense Budget Quarter Six Months

Explanation / Answer

Quarter 1 Quarter 2 Six Month Sales Revenue         432,600          464,100          (31,500) Variable Cost Sales Commission            21,630            23,205             (1,575) Delivery expenses              8,652               9,282                (630) Advertising            12,978            13,923                (945) Total Variable cost            43,260            46,410             (3,150) Fixed costs Sales salary            10,000            10,000                      -   Office Salary              6,130               6,130                      -   Depreciation              4,760               4,760                      -   Insurance              2,010               2,010                      -   Utilities                  820                  820                      -   Repair expenses                  610                  610                      -   Total Fixed Costs            24,330            24,330                      -   Total Selling and administrative expenses            67,590            70,740             (3,150)

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