Morgan Company combines its operating expenses for budget purposes in a sell-

ing and administrative expense budget. For the first 6 months of 2014, the following data

are available.

Sales: 33,000 units quarter 1; 35,000 units quarter 2.

Variable costs per dollar of sales: Sales commissions 5%, delivery expense 2%, and

advertising 3%.

Fixed costs per quarter: Sales salaries $15,000, office salaries $6,000, depreciation

$4,200, insurance $1,500, utilities $800, and repairs expense $600.

Unit selling price: $20.

Instructions

Prepare a selling and administrative expense budget by quarters for the first 6 months (2 quarters)

of 2014.