Flexible Budget for Selling and Administrative Expenses for a Service company Mo
ID: 2511140 • Letter: F
Question
Flexible Budget for Selling and Administrative Expenses for a Service company
Morningside Technologies Inc. uses flexible budgets that are based on the following data:
Prepare a flexible selling and administrative expenses budget for April for sales volumes of $400,000, $500,000, and $600,000.
Feedback
Sales commissions 15% of sales Advertising expense 12% of sales Miscellaneous administrative expense $8,000 per month plus 10% of sales Office salaries expense $32,000 per month Customer support expenses $14,000 per month plus 18% of sales Research and development expense $35,000 per monthExplanation / Answer
MORNINGSIDE TECHNOLOGIES INC. Flexible Selling and Administrative Expenses Budget For the Month Ending April 30 Total sales $400,000 $500,000 $600,000 Variable cost: Sales commissions $60,000 $75,000 $90,000 Advertising expense $48,000 $60,000 $72,000 Miscellaneous administrative expense $40,000 $50,000 $60,000 Customer support expense $72,000 $90,000 $108,000 Total variable cost $220,000 $275,000 $330,000 Fixed cost: Miscellaneous administrative expense 8000 8000 8000 Office salaries expense 32000 32000 32000 Customer support expense 14000 14000 14000 Research and development expense 35000 35000 35000 Total fixed cost 89000 89000 89000 Total selling and administrative expenses $309,000 $364,000 $419,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.