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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:

Line Item Description Value

Sales commissions $7\%$ of sales

Advertising expense $15\%$ of sales

Miscellaneous administrative expense $$9,000$ per month plus $6\%$ of sales

Office salaries expense $$55,000$ per month

Customer support expenses $$21,000$ per month plus $30\%$ of sales

Research and development expense $$73,000$ per monthPrepare a flexible selling and administrative expenses budget for October for sales volumes of $$400,000,$ $$800,000,$ and $$1,000,000.($Use Exhibit $4$ as a model.$)$ Enter all amounts as positive numbers.

Digital Solutions Inc.

Flexible Selling and Administrative Expenses Budget

For the Month Ending October $31$

Line Item Description Amount Amount Amount

Total sales $$400,000$ $$800,000$ $$1,000,000$

Variable cost:

Sales commissions

$fill in the blank $3$

$fill in the blank $4$

$fill in the blank $5$

Advertising expense

fill in the blank $7$

fill in the blank $8$

fill in the blank $9$

Miscellaneous administrative expense

fill in the blank $11$

fill in the blank $12$

fill in the blank $13$

Customer support expenses

fill in the blank $15$

fill in the blank $16$

fill in the blank $17$

Total variable cost $fill in the blank $18$

$fill in the blank $19$

$fill in the blank $20$

Fixed cost:

Miscellaneous administrative expense

$fill in the blank $22$

$fill in the blank $23$

$fill in the blank $24$

Office salaries expense

fill in the blank $26$

fill in the blank $27$

fill in the blank $28$

Customer support expenses

fill in the blank $30$

fill in the blank $31$

fill in the blank $32$

Research and development expense

fill in the blank $34$

fill in the blank $35$

fill in the blank $36$

Total fixed cost $fill in the blank $37$

$fill in the blank $38$

$fill in the blank $39$

Total selling and administrative expenses