Question

Exercise 9-12

Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available.

1.		Sales: 20,200 units quarter 1; 22,200 units quarter 2.
2.		Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%.
3.		Fixed costs per quarter: sales salaries $10,600, office salaries $6,370, depreciation $4,580, insurance $1,630, utilities $840, and repairs expense $650.
4.		Unit selling price: $24.

Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.)

KIRKLAND COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2020June 30, 2020For the Quarter Ending June 30, 2020
	Quarter
	1		2		Six Months
Office SalariesBudgeted Sales in UnitsTotal Selling and Administrative ExpensesTotal VariableAdvertisingVariable ExpensesDepreciationUtilitiesDelivery ExpenseInsuranceSales CommissionsFixed ExpensesRepairs ExpenseSales SalariesTotal Fixed
Sales CommissionsSales SalariesInsuranceOffice SalariesTotal VariableRepairs ExpenseTotal FixedTotal Selling and Administrative ExpensesUtilitiesFixed ExpensesVariable ExpensesAdvertisingBudgeted Sales in UnitsDelivery ExpenseDepreciation
Budgeted Sales in Units    Sales Salaries    Total Fixed    Depreciation    Variable Expenses    Sales Commissions    Total Selling and Administrative Expenses    Fixed Expenses    Insurance    Advertising    Office Salaries    Delivery Expense    Repairs Expense    Total Variable    Utilities	$		$		$
Repairs Expense    Utilities    Total Fixed    Total Variable    Variable Expenses    Budgeted Sales in Units    Total Selling and Administrative Expenses    Advertising    Delivery Expense    Sales Commissions    Depreciation    Sales Salaries    Fixed Expenses    Insurance    Office Salaries
Depreciation    Total Variable    Sales Salaries    Variable Expenses    Delivery Expense    Office Salaries    Total Fixed    Advertising    Total Selling and Administrative Expenses    Budgeted Sales in Units    Fixed Expenses    Insurance    Repairs Expense    Utilities    Sales Commissions
Repairs Expense    Advertising    Office Salaries    Delivery Expense    Variable Expenses    Sales Commissions    Budgeted Sales in Units    Depreciation    Total Variable    Fixed Expenses    Insurance    Total Fixed    Total Selling and Administrative Expenses    Sales Salaries    Utilities
Delivery ExpenseDepreciationOffice SalariesAdvertisingInsuranceUtilitiesRepairs ExpenseSales CommissionsSales SalariesTotal FixedFixed ExpensesTotal Selling and Administrative ExpensesTotal VariableVariable ExpensesBudgeted Sales in Units
Utilities    Total Variable    Total Fixed    Repairs Expense    Office Salaries    Depreciation    Total Selling and Administrative Expenses    Variable Expenses    Advertising    Delivery Expense    Budgeted Sales in Units    Sales Salaries    Fixed Expenses    Sales Commissions    Insurance
Total Variable    Utilities    Repairs Expense    Budgeted Sales in Units    Fixed Expenses    Depreciation    Advertising    Insurance    Office Salaries    Total Fixed    Total Selling and Administrative Expenses    Sales Commissions    Variable Expenses    Delivery Expense    Sales Salaries
Total Fixed    Variable Expenses    Office Salaries    Budgeted Sales in Units    Depreciation    Delivery Expense    Sales Salaries    Fixed Expenses    Utilities    Insurance    Total Selling and Administrative Expenses    Repairs Expense    Sales Commissions    Total Variable    Advertising
Delivery Expense    Total Fixed    Sales Commissions    Sales Salaries    Advertising    Total Variable    Total Selling and Administrative Expenses    Utilities    Variable Expenses    Budgeted Sales in Units    Repairs Expense    Depreciation    Fixed Expenses    Insurance    Office Salaries
Utilities    Budgeted Sales in Units    Fixed Expenses    Variable Expenses    Delivery Expense    Office Salaries    Total Fixed    Depreciation    Advertising    Sales Commissions    Insurance    Repairs Expense    Sales Salaries    Total Selling and Administrative Expenses    Total Variable
Variable Expenses    Insurance    Total Selling and Administrative Expenses    Advertising    Budgeted Sales in Units    Delivery Expense    Office Salaries    Fixed Expenses    Total Variable    Depreciation    Repairs Expense    Sales Commissions    Sales Salaries    Utilities    Total Fixed
Sales Salaries    Sales Commissions    Depreciation    Repairs Expense    Office Salaries    Variable Expenses    Total Fixed    Utilities    Total Selling and Administrative Expenses    Total Variable    Budgeted Sales in Units    Advertising    Insurance    Delivery Expense    Fixed Expenses
Fixed ExpensesDepreciationDelivery ExpenseTotal VariableInsuranceTotal Selling and Administrative ExpensesUtilitiesOffice SalariesRepairs ExpenseVariable ExpensesAdvertisingBudgeted Sales in UnitsTotal FixedSales CommissionsSales Salaries	$		$		$

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Answer 1

Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.)

KIRKLAND COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2020
	Quarter
	1		2		Six Months
Sales revenue	484800		532800		1017600
Variable Cost
Sales commission	$24240		$26640		$50880
Delivery	9696		10656		20352
Advertising	14544		15984		30528
Total Variable cost	48480		53280		101760
Fixed cost
Sales salaries	10600		10600		21200
Office salaries	6370		6370		12740
Depreciation	4580		4580		9160
Insurance	1630		1630		3260
Utilities	840		840		1680
Repairs expense	650		650		1300
Total Fixed cost	24670		24670		49340
Total	$73150		$77950		$151100