E22A-34 Preparing an operating budgetselling and administrative expense budget

Consider the sales budget presented in Exercise E22A-33. Stewarts selling and administrative expenses include the following:

Rent, $1,100 per month

Salaries, $2,000 per month

Commissions, 4% of sales

Depreciation, $1,800 per month

Miscellaneous expenses, 3% of sales

Prepare a selling and administrative expense budget for each of the three quarters of 2016 and totals for the nine-month period.

Budget from exercise E22A-33

Quarter Ended

March 31 June 30 September 30 Nine-Month Total

Cash sales, 20% $20,000 $30,000 $25,000 $75,000

Credit sales, 80% $80,000 $120,000 $100,000 $300,000

Total sales $100,000 $150,000 $125,000 $375,000