manufacturing overhead) for the upcoming fiscal year. Round off to the nearest w

Question

manufacturing overhead) for the upcoming fiscal year. Round off to the nearest whole cent. EXERCISE 9-6 Selling and Administrative Expense Budget [LO2] The budgeted unit sales of Hirst Company for the upcoming fiscal year are provided below: First Second Third Fourth Quarter Quarter Quarter Quarter 14000 1000 10000 The company's variable selling and administrative expenses per unit are $2.75. Fixed selling and administrative expenses include advertising expenses of $12,000 per quarter, executive salaries of $40,000 per quarter, and depreciation of $16,000 per quarter. In addition, the company will make insurance payments of $6,000 in the second quarter and $6,000 in the fourth quarter. Finally, property taxes of $6,000 will be paid in the third quarter. Required: Prepare the company's selling and administrative expense budget for the upcoming fiscal year. Also include the cash disbursements for selling and administrative expenses as per Schedule 7. EXERCISE 9-7 Cash Budget Analysis [LO2] A cash budget, by quarter, is given below for a retail company (000 omitted). The company requires a minimum cash balance of $5,000 to start each quarter. Required: Fill in the missing amounts in the table that follows:

Explanation / Answer

SOLUTION:

Qtr-1 Qtr-2 Qtr-3 Qtr-4 Total Budgeted sales - units 12,000 14,000 11,000 10,000 47,000 Variable selling and administrative expense per unit 2.75 2.75 2.75 2.75 2.75 Expenses- Variable 33,000 38,500 30,250 27,000 129,250 Fixed selling and administrative expenses Executive salaries 40,000 40,000 40,000 40,000 160,000 Advertising 12,000 12,000 12,000 12,000 48,000 Depreciation 16,000 16,000 16,000 16,000 64,000 Insurance 6,000 6,000 12,000 Property taxes 6,000 6,000 Total fixed selling and administrative expense 68,000 74,000 74,000 74,000 290,000 Total selling and administrative expenses 101,000 112,500 104,250 101,500 419,250 Minus: Depreciation 16,000 16,000 16,000 16,000 64,000 Cash disbursements for selling and administrative expe 85,000 96,500 88,250 85,500 355,250

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