11. Selling and administrative expenses are known to be a mixed cost; however, there is a lot of uncertainty about the portion that is fixed. Previous years experience has provided the following information (rounded): Lowest level of sales: 70,000 units Total Operating Expenses: $769,800 Highest level of sales: 110,000 units Total Operating Expenses: $1,009,800 The annual amount of Depreciation on office furniture and equipment is only $21,000and this amount is already included in the fixed portion of the selling and administration expenses. Not included in the above expenses is bad debt expense. Payments for selling and administrative expenses occur in the month in which they are incurred.

12. Sales are on cash and on account (credit), 70% of the sales are collected during the month of sales, 20% the following month, 9.5% the month thereafter. of 1% of sales are considered uncollectible (Bad debt expense)

13. Sales in November and December 2020 are expected to be $807,500 and $1,045,000 respectively. Based on the above collection pattern this will result in Accounts Receivable of $384,988 at December 31, 2020 which will be collected in January and February, 2021

Prepare a Selling and Administrative Expense Budget

ToyWorks Ltd. Selling and Administrative Expense Budget For the year ended December 31, 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 12 $ $ $ $ $ $ $ $ $ $ $ $ $ 6.50 Budgeted sales in units Variable selling and administrative expense per unit Variable expenses Fixed selling and administrative expenses $ - $ $ $ $ $ $ - $ $ $ $ $ 78 Less: purchases discount taken 78 0 0 0 0 0 0 0 0 0 0 0 0 0 Plus: Warehouse rental Total budgeted selling and administrative expenses Less: non-cash items Less: $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 78 $ $ $ $ $ - $ $ $ $ $ $ $ - S $ 0 0 0 0 0 0 0 0 0 0 0 0 0 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 78 ToyWorks Ltd. Selling and Administrative Expense Budget For the year ended December 31, 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 12 $ $ $ $ $ $ $ $ $ $ $ $ $ 6.50 Budgeted sales in units Variable selling and administrative expense per unit Variable expenses Fixed selling and administrative expenses $ - $ $ $ $ $ $ - $ $ $ $ $ 78 Less: purchases discount taken 78 0 0 0 0 0 0 0 0 0 0 0 0 0 Plus: Warehouse rental Total budgeted selling and administrative expenses Less: non-cash items Less: $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 78 $ $ $ $ $ - $ $ $ $ $ $ $ - S $ 0 0 0 0 0 0 0 0 0 0 0 0 0 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 78