Review the following SG&A budget that was prepared at the beginning of the current year. The economy appears to be slowing, and sales are now expected to run only 80% of plan. How much can now be expected to result for total SG&A?

The only fixed cost that can be reduced relates to the advertising campaign. What are the possible impacts of attempting to save money by cutting a portion of the advertising budget?

Estimated units sold	50,000
* Per unit variable SG&A	$4.00
Total variable SG&A	$200,000
Fixed SG&A:
Salaries	$275,000
Office	60,000
Advertising	175,000
Other	25,000
Total fixed SG&A	$535,000
Total budgeted SG&A	$735,000

A.

Total budgeted SG & A

$698,000

B.

Total budgeted SG & A

$687,000

C.

Total budgeted SG & A

$695,000

D.

Total budgeted SG & A

$696,000

E.

None of the above