Flexible Budget for Selling and Administrative Expenses for a Service Company Cl
ID: 2538163 • Letter: F
Question
Flexible Budget for Selling and Administrative Expenses for a Service Company
Cloud Productivity Inc. uses flexible budgets that are based on the following data:
Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)
Sales commissions 14% of sales Advertising expense 20% of sales Miscellaneous administrative expense $5,500 per month plus 12% of sales Office salaries expense $30,000 per month Customer support expenses $13,000 per month plus 20% of sales Research and development expense $30,000 per monthExplanation / Answer
Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Cloud Productivity Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending March 31 Total sales $400,000 $500,000 $600,000 Variable costs: Sales commissions 56,000.00 70,000.00 84,000.00 Advertising expense 80,000.00 100,000.00 120,000.00 Miscellaneous administrative expense 48,000.00 60,000.00 72,000.00 Customer support expenses 80,000.00 100,000.00 120,000.00 Total variable cost 264,000.00 330,000.00 396,000.00 Fixed costs: Miscellaneous administrative expense 5,500.00 5,500.00 5,500.00 Office salaries expense 30,000.00 30,000.00 30,000.00 Customer support expenses 13,000.00 13,000.00 13,000.00 Research and development expense 30,000.00 30,000.00 30,000.00 Total fixed cost 78,500.00 78,500.00 78,500.00 Total selling and administrative expenses 342,500.00 408,500.00 474,500.00
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