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Flexible Budget for Selling and Administrative Expenses for a Service Company

Digital Solutions Inc. uses flexible budgets that are based on the following data:

Sales commissions	15% of sales
Advertising expense	18% of sales
Miscellaneous administrative expense	$8,500 per month plus 12% of sales
Office salaries expense	$29,000 per month
Customer support expenses	$12,000 per month plus 20% of sales
Research and development expense	$31,000 per month

Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)

Total sales	$400,000	$500,000	$600,000
Variable cost:
CashOffice salaries expenseSales commissionsSupplies expenseWages expense	$- Select -	$- Select -	$- Select -
Advertising expenseCashOffice salaries expenseSupplies expenseWages expense	- Select -	- Select -	- Select -
Miscellaneous administrative expenseOffice salaries expensePrepaid insuranceRent expenseWages expense	- Select -	- Select -	- Select -
Customer support expensesRent expenseResearch and development expenseSupplies expenseWages expense	- Select -	- Select -	- Select -
Total variable cost	$fill in the blank 17	$fill in the blank 18	$fill in the blank 19
Fixed cost:
Insurance expenseMiscellaneous administrative expenseRent expenseSupplies expenseWages expense	$- Select -	$- Select -	$- Select -
Insurance expenseOffice salaries expensePrepaid insuranceRent expenseWages expense	- Select -	- Select -	- Select -
Customer support expensesInsurance expenseRent expenseSupplies expenseWages expense	- Select -	- Select -	- Select -
Insurance expenseRent expenseResearch and development expenseSupplies expenseWages expense	- Select -	- Select -	- Select -
Total fixed cost
Total selling and administrative expenses