E22A-34 Preparing an operating budget—selling and administrative expense budget
ID: 2467117 • Letter: E
Question
E22A-34 Preparing an operating budget—selling and administrative expense budget
Consider the sales budget presented in Exercise E22A-33. Stewart’s selling and administrative expenses include the following:
Rent, $1,100 per month
Salaries, $2,000 per month
Commissions, 4% of sales
Depreciation, $1,800 per month
Miscellaneous expenses, 3% of sales
Prepare a selling and administrative expense budget for each of the three quarters of 2016 and totals for the nine-month period.
Budget from exercise E22A-33
Quarter Ended
March 31 June 30 September 30 Nine-Month Total
Cash sales, 20% $20,000 $30,000 $25,000 $75,000
Credit sales, 80% $80,000 $120,000 $100,000 $300,000
Total sales $100,000 $150,000 $125,000 $375,000
Explanation / Answer
March June Dec Total Rent $ 1,100 $ 1,100 $ 1,100 $ 3,300 Salaries $ 2,000 $ 2,000 $ 2,000 $ 6,000 Commission $ 4,000 $ 6,000 $ 5,000 $ 15,000 Depreciation $ 1,800 $ 1,800 $ 1,800 $ 5,400 Miscellaneous Exp $ 3,000 $ 4,500 $ 3,750 $ 11,250 Total $ 11,900 $ 15,400 $ 13,650 $ 40,950
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