Prepare Selling and administrative expense budget for tyler for the year ended December 31, 2018.

Tyler uses two separate variable manufacturing overhead rates. The forming and assembly departments use similar equipment and with the companys concentration on a single product, the manufacturing overhead is allocated based on volume (i.e. the units produced). The combined unit variable overhead manufacturing rate for forming and assembly is $3.25, consisting of: Utilities--$1.50; Indirect Materials--$0.50; Plant maintenance-- $0.75; environmental fee--$0.35; and Other--$0.15. The best cost driver for the finishing department is considered to be direct labour hours. Here the predetermined variable manufacturing overhead is expected to be $2.05 per hour.

Fixed manufacturing overhead costs are not separated between departments. The total costs for the entire year are as follows: Training and development $ 43,200 Property and business taxes 39,000 Supervisors salary 269,400 Amortization on equipment 178,800 Insurance 96,000 Other 117,600 $ 744,000 The property and business taxes are paid in one lump sum on June 30 of each year. The expected payment for next year (2018) is $39,600. The annual insurance premium is paid at the beginning of September each year. There should be no change in the premium for 2018, it should be the same as 2017. All other cash-related fixed manufacturing overhead costs are incurred evenly over the year and paid as incurred. Tyler uses the straight line method of amortization.

Selling and administrative expenses are known to be a mixed cost; however, there is a lot of uncertainty about the portion that is fixed. Previous years experience has provided the following information (rounded): Lowest level of sales: 140,000 units Total Operating Expenses: $778,200 Highest level of sales: 220,000 units Total Operating Expenses: $1,023,000 The annual amount of amortization on office furniture and equipment is only $24,000and this amount is not included in the fixed portion of the selling and administration expenses. Also not included in the above expenses is bad debt expense. Payments for selling and administrative expenses occur in the month in which they are incurred.