Please help. I can\'t figure out the numbers for \"fixed expenses\" under sellin

Question

Please help. I can't figure out the numbers for "fixed expenses" under selling and administrative budget.

Glendo Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2013.

Your assistant has prepared two budgets: (1) The manufacturing overhead budget shows expected costs to be 150% of direct labor cost. (2) The direct materials budget for Tarr shows the cost of Tarr purchases to be $299,000 in quarter 1 and $427,000 in quarter 2.

1. Sales: Quarter 1, 29,800 bags; quarter 2, 43,400 bags. Selling price is $62 per bag. 2. Direct materials: Each bag of Snare requires 5 pounds of Gumm at a cost of $4 per pound and 7 pounds of Tarr at $1.75 per pound. 3. Desired inventory levels:

Explanation / Answer

The quarterly selling and administrative expenses of $177000 are fixed.

Hence monthly fixed cost = 177000/3 = $59000

Hence,

Fixed 1 = 59000

Fixed 2 = 59000

Fixed 3 = 59000

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