Comma Co. makes and sells widgets. The company is in the process of preparing it
ID: 2513579 • Letter: C
Question
Comma Co. makes and sells widgets. The company is in the process of preparing its selling and administrative expense budget for the month. The following budget data are available: Item Variable Cost Per Unit Sold Monthly Fixed Cost Sales commissions $1 $10,000 Shipping $3 Advertising $4 Executive salaries $120,000 Depreciation on office equipment $4,000 Other $2 $6,000 Expenses are paid in the month incurred. If the company has budgeted to sell 80,000 widgets in October, how much is the total budgeted selling and administrative expenses for October? Select one: a. $940,000 b. $800,000 c. $930,000 d. $140,000
Explanation / Answer
Calculate total budgeted selling and administrative expenses for October :
so answer is a) $940,000
October Sales commission (80000*1+10000) 90000 Shipping (80000*3) 240000 Advertising (80000*4) 320000 Executive salaries 120000 Depreciation on office equipment 4000 Other (2*80000+6000) 166000 Total selling and administrative expense 940000