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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

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 8% of sales
Advertising expense 15% of sales
Miscellaneous administrative expense $10,000 per month plus 4% of sales
Office salaries expense $50,000 per month
Customer support expenses $20,000 per month plus 30% of sales
Research and development expense $75,000 per month
Prepare a flexible selling and administrative expenses budget for October for sales volumes of $500,000, $750,000, and $1,000,000.(Use Exhibit 4 as a model.)
Digital Solutions Inc.
Flexible Selling and Administrative Expenses Budget
For the Month Ending October 31
Line Item Description Amount Amount Amount
Total sales $500,000 $750,000 $1,000,000
Variable cost:
Sales commissions
$Sales commissions
$Sales commissions
$Sales commissions
Advertising expense
Advertising expense
Advertising expense
Advertising expense
Miscellaneous administrative expense
Miscellaneous administrative expense
Miscellaneous administrative expense
Miscellaneous administrative expense
Customer support expenses
Customer support expenses
Customer support expenses
Customer support expenses
Total variable cost $Total variable cost
$Total variable cost
$Total variable cost
Fixed cost:
Miscellaneous administrative expense
$Miscellaneous administrative expense
$Miscellaneous administrative expense
$Miscellaneous administrative expense
Office salaries expense
Office salaries expense
Office salaries expense
Office salaries expense
Customer support expenses
Customer support expenses
Customer support expenses
Customer support expenses
Research and development expense
Research and development expense
Research and development expense
Research and development expense
Total fixed cost $Total fixed cost
$Total fixed cost
$Total fixed cost
Total selling and administrative expenses $Total selling and administrative expenses
$Total selling and administrative expenses
$Total selling and administrative expenses

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