Personal Budget At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) Purchase season football tickets in September Additional entertainment for each month Pay fall semester tuition in September $8,790 120 310 4,700 430 240 Pay apartment deposit on September 2 (to be returned December 15) Part-time job earnings each month (net of taxes) 600 1,090 Pay rent at the beginning of each month Pay for food each month a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments. Craig Kovar Cash Budget For the Four Months Ending December 31 Estimated cash receipts from: Total cash receipts Less estimated cash payments for: Total cash payments Cash increase (decrease) Cash balance at end of month September October November December b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? Static c. What are the budget implications for Craig Kovar? Craig can see that his present plan will not provide with the original plan, he would be $ short sufficient cash. If Craig did not budget but went ahead at the end of December, with no time left to adjust. 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 Advertising expense Miscellaneous administrative expense Office salaries expense Customer support expenses Research and development expense 14% of sales 20% of sales $5,000 per month plus 12% of sales $29,000 per month $14,000 per month plus 20% of sales $30,000 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 Variable cost: Total variable cost Fixed cost: Total fixed cost Total selling and administrative expenses $400,000 $500,000 $600,000