The selling and administrative expense budget of Fenley Corporation is based on

Question

The selling and administrative expense budget of Fenley Corporation is based on the number of units sold, which are budgeted to be 2,500 units in January. The variable selling and administrative expense is $4.40 per unit. The budgeted fixed selling and administrative expense is $35,750 per month, which includes depreciation of $4,000. The remainder of the fixed selling and administrative expense represents current cash flows.

Required:

Prepare the selling and administrative expense budget for January.

Explanation / Answer

selling and administrative expense budget for January. budgeted sales 2500 variable selling and administrative expense per unit 4.40 Budgeted variable expenses 11000 Budgeted fixed selling and administrative expenses: 31750 depreciation 4000 Total budgeted fixed selling and administrative exp.35,750 Total budgeted selling and administrative expenses(11000+35,750) 46750 Less depreciation4000 Cash disbursements for selling and administrative exp. $42750

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