Selling/Admin. Expenses Budget The sales budget is often used as the starting point for the selling and administrative expenses budget. For example, a budgeted increase in sales may require more advertising expenses. LearnCo has prepared its selling and administrative expenses budget as follows. This budget is merely reviewed by you for use on the budgeted income statement. LearnCo Selling and Administrative Expenses Budget For the Year Ending December 31, 20Y2 Selling expenses: Sales salaries expense $45,000 Advertising expense 15,000 Travel expense 5,400 Total selling expenses $65,400 Administrative expenses: Officers' salaries expense $85,000 35,000 Office salaries expense Office rent expense Office supplies expense 26,000 6,400 1,600 Miscellaneous administrative expenses Total administrative expenses 154,000 $219,400 Total selling and administrative expenses Budgeted Income Statement The budgeted income statement is prepared by integrating the sales budget, cost of goods sold budget, and selling and administrative expenses budget. Additional information that may be helpful in preparing the budgeted income statement are on the following Budgeted Income Statement Data Table Review the Budgeted Income Statement Data Table, then complete the budgeted income statement that follows the table. Round the computed amount for income tax to the nearest whole dollar. The cost of goods sold budget integrates the direct materials purchases budget, direct labor cost budget, and factory overhead cost budget. Estimated and desired inventories for direct materials, work in process, and finished goods must also be integrated into the cost of goods sold budget. Complete the preparation of the cost of goods sold budget for LearnCo, using information that follows provided by the controller, and using the previous budgets you have prepared. LearnCo Cost of Goods Sold Budget For the Year Ending December 31, 20Y2 Finished goods inventory, January 1, 2012 Work in process inventory, $2,010 January 1, 20Y2 Direct materials: $9,870 $1,600 Direct materials inventory, January 1, 20Y2 Direct materials purchases 72,88 x Cost of direct materials available for use 74,88: x (1,440) Direct materials inventory, December 31, 20Y2 Cost of direct materials placed in production Direct labor $ 73,08 x 303,2 x Factory overhead 18,10 394,4 x Total manufacturing costs Total work in process during period $ 396,4 x Work in process inventory, December 31, 20Y2 (1,250) 395,1 x Cost of goods manufactured Cost of finished goods available for sale $ 405,0 x (1,500) Finished goods inventory, December 31, 2012 Cost of goods sold $ 403,5 x
