3 The budgeted unit sales of Haerve Company for the upcoming fiscal year are pro
ID: 2454943 • Letter: 3
Question
3
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
11,000
12,600
10,400
9,300
The company’s variable selling and administrative expenses per unit are $2.50. Fixed selling and administrative expenses include advertising expenses of $12,000 per quarter, executive salaries of $42,000 per quarter, and depreciation of $16,000 per quarter. In addition, the company will make insurance payments of $6,000 in the 2nd Quarter and $6,000 in the 4th Quarter. Finally, property taxes of $7,000 will be paid in the 3rd Quarter.
Required:
Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Variable cost" answers to 2 decimal places.)
Haerve Company
Selling and Administrative Expense Budget
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Budgeted unit sales
Variable selling and administrative expenses per unit
Variable expense
Fixed selling and administrative expenses:
Advertising
Executive salaries
Insurance
Property taxes
Depreciation
Total fixed selling and administrative expenses
Total selling and administrative expenses
Less: depreciation
Cash disbursements for selling and administrative expenses
The budgeted unit sales of Haerve Company for the upcoming fiscal year are provided below:
Explanation / Answer
Selling and Administrative expense budget as follows:
1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Year Budgeted Unit sales 11,000 12,600 10,400 9,300 43,300 A Variable selling and administrative expenses per unit: Variable expenses @ $2.50 per unit $27,500 $31,500 $26,000 $23,250 $1,08,250 B Fixed selling and administrative expenses : a. Advertising $12,000 $12,000 $12,000 $12,000 $48,000 b. Executive salaries $42,000 $42,000 $42,000 $42,000 $1,68,000 c. Insurance $6,000 $6,000 $12,000 d. Property taxes $7,000 $7,000 e. Depreciation $16,000 $16,000 $16,000 $16,000 $64,000 Total Fixed selling and administrative expenses (a+b+c+d+e) $70,000 $76,000 $77,000 $76,000 $2,99,000 Total selling and administrative expenses (A+B) $97,500 $1,07,500 $1,03,000 $99,250 $4,07,250 Less Depreciation -$16,000 -$16,000 -$16,000 -$16,000 -$64,000 Cash disbursements for selling and administrative expenses $81,500 $91,500 $87,000 $83,250 $3,43,250Related Questions
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