Please help! Flexible Budget for Selling and Administrative Expenses Cloud produ
ID: 2415397 • Letter: P
Question
Please help!
Flexible Budget for Selling and Administrative Expenses Cloud productivity Inc. uses flexible budgets that are based on the following data: Sales commissions 14% f sales Advertising expense 18% of sales Miscellaneous administrative expense $6,500 per month plus 12% of sales Office salaries expenses $28,000 per month Customer support expenses $12,000 per month plus 20%of sales Research and development expense $30,000 per month Prepare a flexible selling and administrative expenses budget for March 2016 for sales volumes of $400,000, $500,000 and $600,000. Enter all amount as positive numbers.Explanation / Answer
Flexible Selling and Administrative Expenses Budget:
$ $ $ Total sales 400,000 500,000 600,000 Variable costs: Sales commisions @ 14% 56,000 70,000 84,000 Advertising expense @ 18% 72,000 90,000 108,000 Miscellaneous administrative expenses @ 12% 48,000 60,000 72,000 Customer support expense @ 20% 80,000 100,000 120,000 Total variable cost 256,000 320,000 384,000 Fixed cost Miscellaneous administrative expense 6,500 6,500 6,500 Office salaries expense 28,000 28,000 28,000 Customer support expense 12,000 12,000 12,000 Research and development expense 30,000 30,000 30,000 Total fixed cost 76,500 76,500 76,500 Total selling and administrative expense 332,500 396,500 460,500