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	14% of sales
Advertising expense	18% of sales
Miscellaneous administrative expense	$8,000 per month plus 12% of sales
Office salaries expense	$28,000 per month
Customer support expenses	$14,000 per month plus 20% of sales
Research and development expense	$32,000 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.)

Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31

Total sales	$400,000	$500,000	$600,000
Variable cost:
CashOffice salaries expenseSales commissionsSupplies expenseWages expenseSales commissions	$Sales commissions	$Sales commissions	$Sales commissions
Advertising expenseCashOffice salaries expenseSupplies expenseWages expenseAdvertising expense	Advertising expense	Advertising expense	Advertising expense
Miscellaneous administrative expenseOffice salaries expensePrepaid insuranceRent expenseWages expenseMiscellaneous administrative expense	Miscellaneous administrative expense	Miscellaneous administrative expense	Miscellaneous administrative expense
Customer support expensesRent expenseResearch and development expenseSupplies expenseWages expenseCustomer support expenses	Customer support expenses	Customer support expenses	Customer support expenses
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 expenseMiscellaneous administrative expense	$Miscellaneous administrative expense	$Miscellaneous administrative expense	$Miscellaneous administrative expense
Insurance expenseOffice salaries expensePrepaid insuranceRent expenseWages expenseOffice salaries expense	Office salaries expense	Office salaries expense	Office salaries expense
Customer support expensesInsurance expenseRent expenseSupplies expenseWages expenseCustomer support expenses	Customer support expenses	Customer support expenses	Customer support expenses
Insurance expenseRent expenseResearch and development expenseSupplies expenseWages expenseResearch and development expense	Research and development expense	Research and development expense	Research and development expense
Total fixed cost	$fill in the blank 36	$fill in the blank 37	$fill in the blank 38
Total selling and administrative expenses	$fill in the blank 39	$fill in the blank 40	$fill in the blank 41