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	7% of sales
Advertising expense	17% of sales
Miscellaneous administrative expense	$12,000 per month plus 6% of sales
Office salaries expense	$48,000 per month
Customer support expenses	$16,000 per month plus 27% of sales
Research and development expense	$71,000 per month

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.

Open spreadsheet

Prepare a flexible selling and administrative expenses budget for October for sales volumes of $600,000, $900,000, and $1,000,000. (Use Exhibit 5 as a model.) Enter all amounts as positive numbers.

Digital Solutions Inc.
Flexible Selling and Administrative Expenses Budget
For the Month Ending October 31
Total sales	$600,000		$900,000		$1,000,000
Variable cost:
CashOffice salaries expenseSales commissionsSupplies expenseWages expense		$fill in the blank 3		$fill in the blank 4		$fill in the blank 5
Advertising expenseCashOffice salaries expenseSupplies expenseWages expense		fill in the blank 7		fill in the blank 8		fill in the blank 9
Miscellaneous administrative expenseOffice salaries expensePrepaid insuranceRent expenseWages expense		fill in the blank 11		fill in the blank 12		fill in the blank 13
Customer support expensesRent expenseResearch and development expenseSupplies expenseWages expense		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:
Insurance expenseMiscellaneous administrative expenseRent expenseSupplies expenseWages expense		$fill in the blank 22		$fill in the blank 23		$fill in the blank 24
Insurance expenseOffice salaries expensePrepaid insuranceRent expenseWages expense		fill in the blank 26		fill in the blank 27		fill in the blank 28
Customer support expensesInsurance expenseRent expenseSupplies expenseWages expense		fill in the blank 30		fill in the blank 31		fill in the blank 32
Insurance expenseRent expenseResearch and development expenseSupplies expenseWages 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		$fill in the blank 40		$fill in the blank 41		$fill in the blank 42