E8-6 - Please explain how you arrived at your answers. Thank you! Exercise 8-6 S

Question

E8-6 - Please explain how you arrived at your answers. Thank you!

Exercise 8-6 Selling and Administrative Expense Budget [LO7]

The company’s variable selling and administrative expenses per unit are $1.50. Fixed selling and administrative expenses include advertising expenses of $12,000 per quarter, executive salaries of $37,000 per quarter, and depreciation of $15,000 per quarter. In addition, the company will make insurance payments of $5,000 in the 2nd Quarter and $5,000 in the 4th Quarter. Finally, property taxes of $6,000 will be paid in the 3rd Quarter.

Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Haerve Company
Selling and Administrative Expense Budget

Exercise 8-6 Selling and Administrative Expense Budget [LO7]

The budgeted unit sales of Haerve Company for the upcoming fiscal year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter   Budgeted unit sales 11,100 13,100 10,400 9,700

The company’s variable selling and administrative expenses per unit are $1.50. Fixed selling and administrative expenses include advertising expenses of $12,000 per quarter, executive salaries of $37,000 per quarter, and depreciation of $15,000 per quarter. In addition, the company will make insurance payments of $5,000 in the 2nd Quarter and $5,000 in the 4th Quarter. Finally, property taxes of $6,000 will be paid in the 3rd Quarter.

Required:

Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Haerve Company
Selling and Administrative Expense Budget

    1st
Quarter     2nd
   Quarter     3rd
Quarter     4th
Quarter     Year   (Click to select)Variable selling and administrative expensesDepreciationProperty taxesExecutive salariesInsurance $    $    $    $    $      Fixed selling and administrative expenses:        (Click to select)BorrowingsEquipment purchsesInterestAdvertisingVariable selling and administrative expenses                       (Click to select)BorrowingsExecutive salariesInterestEquipment purchasesVariable selling and administrative expenses                       (Click to select)InsuranceVariable selling and administrative expensesBorrowingsEquipment purchasesInterest                       (Click to select)Variable selling and administrative expensesEquipment purchasesProperty taxesBorrowingsInterest                       (Click to select)BorrowingsVariable selling and administrative expensesInterestDepreciationEquipment purchases                  Total fixed selling and administrative expenses                  Total selling and administrative expenses                       (Click to select)Less depreciationLess insuranceLess advertisingLess executive salariesLess property taxes                  Cash disbursements for selling and administrative expenses $    $    $    $    $   

Explanation / Answer

selling and adming exp. Particular Q1 Q2 Q3 Q4 Total variable selling and admin 16650 19650 15600 14550 66450 fixed selling and admin 49000 49000 49000 49000 196000 insurance 5000 5000 10000 property tax 6000 6000 Cash disbursement of selling and admin 65650 73650 70600 68550 278450

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