Flexible Budget for Selling and Administrative Expenses Cloud Productivity Inc.
ID: 2461026 • Letter: F
Question
Flexible Budget for Selling and Administrative Expenses
Cloud Productivity Inc. uses flexible budgets that are based on the following data:
Prepare a flexible selling and administrative expenses budget for March 2016 for sales volumes of $400,000, $500,000, and $600,000. Enter all amounts as positive numbers.
Sales commissions 14% of sales Advertising expense 18% of sales Miscellaneous administrative expense $6,500 per month plus 12% of sales Office salaries expense $28,000 per month Customer support expenses $12,000 per month plus 20% of sales Research and development expense $30,000 per monthExplanation / Answer
Cloud Productivity Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending March 31, 2016 Total sales 400000 500000 600000 Variable Costs Sales Commissions 56000 70000 84000 Advertising Expenses 72000 90000 108000 Miscellaneous Administrative Expenses 48000 60000 72000 Customer Support Expenses 80000 100000 120000 Total variable Cost 256000 320000 384000 Fixed Costs Miscellaneous Administrative Expenses 6500 6500 6500 Office Salaries Expenses 28000 28000 28000 Customer Support 12000 12000 12000 Research & Development 30000 30000 30000 tOtal Fixed Cost 76500 76500 76500 Total Selling & Administrative Expenses 332500 396500 460500
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