Duncan Company combines its operating expenses for budget purposes in a selling

Question

Duncan Company combines its operating expenses for budget purposes in a selling and administrative expense budget. Fo' the first 6 months of 2014, the following data are available. Sales: 20,70C units quarter 1; 22,400 units quarter 2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 4%. Fixed costs per quarter: sales salaries $10,800, office salaries S6.340. depreciation $4,400. insurance $1,960. utilities $850, and repairs expense $690. Unit selling price: S25. Prepare a selling and administrative expense budget by quarters fo' the first 6 months of 2014. (List variable expenses before fixed expense.)

Explanation / Answer

Answer:

Selling and Administrative Expense Budget For the six month ending June 30, 2014 Q1 Q2 Six months Sales in units      20,700      22,400          43,100 Selling price per unit in $               25               25 Sales in $    517,500    560,000    1,077,500 Variable Costs Sales commission (5% of sales value)      25,875      28,000          53,875 Delivery expense (2% of sales value)      10,350      11,200          21,550 Advertising expense (4% of sales value)      20,700      22,400          43,100 Fixed Expenses (In $) Sales salaries      10,800      10,800          21,600 Office salaries         6,340         6,340          12,680 Depreciation         4,450         4,450            8,900 Insurance         1,960         1,960            3,920 Utilities            850            850            1,700 Repair expense            690            690            1,380 Total budgeted costs      82,015      86,690        168,705

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