The following budget information is given for Shaheen Company for the last quart
ID: 2500650 • Letter: T
Question
The following budget information is given for Shaheen Company for the last quarter of 2015: Expected sales for October are $100,000. Monthly sales are expected to increase 6% in November and 12% in December. Monthly expenses: Monthly salary = $8,000 Sales commissions = 14% of sales Rent expense = $4,000 Depreciation expense = $1,800 Miscellaneous expense = 3.5% of sales Advertising expense = 5.5% of sales Prepare an operating expense budget, separating variable (listed first with a total) and fixed expense (listed second with a total) prior to totaling the Operating Expenses together, for the last quarter of 2015, showing each month in detail and the total quarter. The following budget information is given for Shaheen Company for the last quarter of 2015:Explanation / Answer
October
November
December
Total quarter
Budgeted sales
$100,000
$106,000
$118,720
$324,720
Less- Variable cost
Sales commission = 14% of sales
$14,000
$14,840
$16,620.8
$45,461
Miscellaneous expense = 3.5% of sales
$3,500
$3,710
$4,155.2
$11,365
Advertising expense = 5.5% of sales
$5,500
$5,830
$6,530
$17,860
Less - fixed cost
Monthly salary
$8,000
$8,000
$8,000
$24,000
Rent expense
$4,000
$4,000
$4,000
$12,000
Depreciation expense
$1,800
$1,800
$1,800
$5,400
Profit
$63,200
$67,820
$77,614
$208,634
October
November
December
Total quarter
Budgeted sales
$100,000
$106,000
$118,720
$324,720
Less- Variable cost
Sales commission = 14% of sales
$14,000
$14,840
$16,620.8
$45,461
Miscellaneous expense = 3.5% of sales
$3,500
$3,710
$4,155.2
$11,365
Advertising expense = 5.5% of sales
$5,500
$5,830
$6,530
$17,860
Less - fixed cost
Monthly salary
$8,000
$8,000
$8,000
$24,000
Rent expense
$4,000
$4,000
$4,000
$12,000
Depreciation expense
$1,800
$1,800
$1,800
$5,400
Profit
$63,200
$67,820
$77,614
$208,634
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