Question

Flexible Budget for Selling and Administrative Expenses Agent Blaze uses flexible budgets that are based on the following data: Sales commissions 8% of sales Advertising expense 22% of sales Miscellaneous selling expense $2,500 plus 2% of sales Office salaries expense $17,000 per month Office supplies expense 3% of sales Miscellaneous administrative expense $1,750 per month plus 1% of sales Prepare a flexible selling and administrative expenses budget for January 2016, for sales volumes of $110,000, $140,000, and $165,000. (Use Exhibit 5 as a model.) Enter all amounts as positive numbers. Agent Blaze Flexible Selling and Administrative Expenses Budget For the Month Ending January 31, 2016 Total sales $110,000 $140,000 $165,000 Variable cost: X 112,000 X 132,000 X 88,000 Sales commissions Advertising expense Miscellaneous selling expense Office supplies expense Miscellaneous administrative expense Total variable cost Fixed cost: Miscellaneous selling expense Office salaries expense Miscellaneous administrative expense Total fixed cost 56,450X 66,050X Total selling and administrative expenses

Answer 1

Agent Blaze Flexible Selling and Administrative Expenses Budget for the Mouth Ending January 31, 2016 Total sales $110,000 $140,000 $165,000 Variable cost: Sales commissions $ 8,000 $11,200 $13,200 Advertising expense $ 24,200 $30,800 $ 36,300 Miscellaneous selling expense $2,200 $2,000 $3,300 office supplies expense $3,300 $4,200 $4,950 ruscellaneous administrative expense $1,100 $1,900 $1,650 Total variable cost $39,600 $50,400 $59.4ool fixed cost? Miscellaneous selling expense $2,500 $2,500 $2,500 office salaries expense $ 17,000 $17,000 $17,000 Miscellaneous administrative expense $ 1,750 $ 1,750 $1750 - Total fixed cost $21,250 $21,950 $21,250 and administrative $60,850 $71,650 $80,650 expenses ! Toto

Calculation: Sales commissions & 8% of sales for $110,000 sales commissions = 8% * $ 110,000 = $ 8,800 For $140,000: sales commissions = 8% * $ 140,000 = $11,200 for $ 165,000: Sales commissions = 8% * $165,000 = $13,200 Advertising expense = 22% of sales. for $110,000 & Advertising expense = 22% & $110,000 = $ 24,200 for $140,000 & Advertising expense - 22% * $140,000 = $30,000 for $165,000 & Advertising expense = 22% x $165,000 = $36,300 Miscellaneous selling expense = 2% of Sales for $110,000 & Miscellaneous selling expense = 2% × $110,000 = $2,200 for $140,000 & Miscellaneous selling expense = 2% x a $140. $ 149000 = $ 2,800 for $165,000: Miscellaneoup selling expense = 2% * $ 165,000 = $3,300

Office Supplies Expense = 3% of sales for $110,000? Office Supplies Expense = 3% * $ 110,000 - $3,300 for $140,000: Office Supplies Expense = 3% * & 140,000 = $4,200 for $ 165,000: office supplies Expense = 3% * $ 165,000 = $ 4,950 Miscellaneous administrative expense = 1% of cales for $110,000? Miscellaneous administrative expense - 1% * $ 110,000 = $1,100 for $140,000: Miscellaneous adnunistrative expense = 1% * $ 140,000 = $1,400 for $ 165,000 : Miscellaneous administrative expense - 1% * $ 165,000 = $1,650