Agent Blaze uses flexible budgets that are based on the following data 24% of sa
ID: 2609008 • Letter: A
Question
Agent Blaze uses flexible budgets that are based on the following data 24% of sales $2,350 plus 3% of sales $16,000 per month Office s Miscellaneous administrative expense Prepare a flexible selling and administrative expenses budget for January 2016, for sales volumes of $105,000, $130,000, and $160,000. (Use Exhibit 5 as a model.) Ente amounts as positive numbers. Agent Blaze Flexible Seling and Administrative Expenses Budget 31, 2016 130,000 $160,000 Total sales Variable cost $105,000 5,250 Advertising expense Office supplies expense Miscellaneous administrative expense Miscel laneous administrative expenseExplanation / Answer
Agent Blaze Flexible Selling and Administrative Expenses Budget for the month ending Jan 31, 2016 Total Sales $105000 $130000 $160000 Variable Cost : $ $ $ Sales commission (WN-1) 5250 6500 8000 Advertising expenses (WN-2) 25200 31200 38400 Miscellaneous selling expenses (WN-3) 3150 3900 4800 Office supplies expenses (WN-4) 4200 5200 6400 Miscellaneous administrative expenses (WN-5) 2100 2600 3200 Total Variable Cost (A) $39900 $49400 $60800 Fixed Cost : $ $ $ Miscellaneous selling expenses (WN-3) 2350 2350 2350 Office salaries expenses 16000 16000 16000 Miscellaneous administrative expenses (WN-5) 1700 1700 1700 Total Fixed Cost (B) $20050 $20050 $20050 Total selling and administrative expenses (A) + (B) $59950 $69450 $80850 Working Notes : WN-1 : Sales commission $105000 * 5% $130000 * 5% $160000 * 5% WN-2 : Advertising expenses $105000 * 24% $130000 * 24% $160000 * 24% WN-4 : Office supplies expenses $105000 * 4% $130000 * 4% $160000 * 4% WN-3 : Miscellaneous selling expenses : $ 2350 are to be taken as fixed costs and variable cost will be following : $105000 * 3% $130000 * 3% $160000 * 3% WN-5 : Miscellaneous administrative expenses : $1700 are fied cost and variable costs will be following : $105000 * 2% $130000 * 2% $160000 * 2%