Agent Blaze uses flexible budgets that are based on the following data: Sales co
ID: 2374914 • Letter: A
Question
Agent Blaze uses flexible budgets that are based on the following data:
Sales commissions . . . . . . . . . . . . . . . . . 6% of sales
Advertising expense . . . . . . . . . . . . . . . . 20% of sales
Miscellaneous selling expense . . . . . . %u2026.$2,500 plus 2% of sales
Office salaries expense . . . . . . . . . . . . . . $17,000 per month
Office supplies expense . . . . . . . . . . . . . . .3% of sales
Miscellaneous administrative expense . . . $1,750 per month plus 1% of sales
Prepare a flexible selling and administrative expenses budget for January 2010 for sales volumes of $100,000, $125,000, and $150,000
Explanation / Answer
Flexible selling and administrative expenses budget for January 2010 Total Sales $ 100,000.00 $ 125,000.00 $ 150,000.00 Variable Cost: Sales Commission $ 6,000.00 $ 7,500.00 $ 9,000.00 Advertising Expenses $ 20,000.00 $ 25,000.00 $ 30,000.00 Misc Selling Expenses $ 2,000.00 $ 2,500.00 $ 3,000.00 Office Supplies Expenses $ 3,000.00 $ 3,750.00 $ 4,500.00 Misc Administrative Expenses $ 1,000.00 $ 1,250.00 $ 1,500.00 Total Variable Cost $ 32,000.00 $ 40,000.00 $ 48,000.00 Fixed Cost: Misc Selling Expenses $ 2,500.00 $ 2,500.00 $ 2,500.00 Office Salaries Expenses $ 17,000.00 $ 17,000.00 $ 17,000.00 Misc Administrative Expenses $ 1,750.00 $ 1,750.00 $ 1,750.00 Total Fixed Cost $ 21,250.00 $ 21,250.00 $ 21,250.00 Total Selling & Administrative Expenses $ 53,250.00 $ 61,250.00 $ 69,250.00