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11 June, 12:45

The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below:

1st Quarter 2nd Quarter 3rd Quarter 3th Quarter

Budgeted unit sales 15,000 16,000 14,000 13,000

The company's variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $8,000 will be paid in the second quarter.

Required:

Prepare the company's selling and administrative expense budget for the upcoming fiscal year.

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Answers (1)
  1. 11 June, 14:38
    0
    Total administrative expense = $317,000

    Explanation:

    Giving the following information:

    The budgeted unit sales:

    1st Quarter = 15,000

    2nd Quarter = 16,000

    3rd Quarter = 14,000

    4th Quarter = 13,000

    -Variable selling and administrative expense per unit is $2.50.

    -Fixed selling and administrative expenses include advertising expenses of $8,000 per quarter

    -Executive salaries of $35,000 per quarter

    1st Q:

    Variable = 2.5*15,000 = $37,500

    Fixed = 8,000 + 35,000 = $43,000

    2nd Q:

    Variable = 2.5*16,000 = $40,000

    Fixed = 8,000 + 35,000 = $43,000

    3rd Q:

    Variable = 2.5*14,000 = $35,000

    Fixed = 8,000 + 35,000 = $43,000

    4th Q:

    Variable = 2.5*13,000 = $32,500

    Fixed = 8,000 + 35,000 = $43,000

    Total administrative expense = $317,000
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