Carla Vista Company combines its operating expenses for budget purposes in a selling and administrative expense budget.
Question:
Carla Vista Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available.
1. Sales: 20,000 units quarter 1; 22,700 units quarter 2.
2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%.
3. Fixed costs per quarter: sales salaries $10,800, office salaries $6,360, depreciation $4,370, insurance $1,610, utilities $850, and repairs expense $620.
4. Unit selling price: $23.
Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.)
Quarter
1 2 Six Months
Budgeted Sales in Units
Variable Expenses
Advertising
Delivery Expense
Sales Commissions
Total Variable Fixed Expenses
Sales Salaries
Office Salaries
Depreciation
Insurance
Utilities
Repairs Expense
Total Fixed
Total Selling and Administrative Expenses