Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

To complete the entire production budget, we need to add two more items related to production: the selling expenses and the administrative expenses. Some of

To complete the entire production budget, we need to add two more items related to production: the selling expenses and the administrative expenses. Some of these expenses are variable, like sales commissions, and data entry personnel, while other expenses, like insurance and property taxes happen no matter how many pairs of shoes we make or sell. These are our fixed expenses. So we are going to make some assumptions so we can start work on this budget.

Based on prior year's actual expenses, let's assume that the variable selling expenses of sales commission is calculated at 5% of unit sales. The fixed selling expenses. typically rent, depreciation expenses, advertising, and other office expenses. In our example, we will assume the following: rent, $500 per quarter, advertising, $300 per quarter; office expense, $200 per quarter.

Total Selling expenses for second and fourth quarter would be:

1) $6,125

2) None of these

3) $5,625

4) $6,500

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Capitalism Its Fall And Rise In The Twentieth Century

Authors: Jeffry A Frieden

1st Edition

0393058085, 9780393058086

More Books

Students also viewed these Economics questions

Question

13. Give four examples of psychological Maginot lines.

Answered: 1 week ago