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: 20,600 units quarter 1; 22,100 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 $10,000, office salaries 56,130, depreciation $4,760, insurance $2,010, utilities $820, and repairs expense $610. 4. Unit selling price: $21.

Answer 1

Selling and administrative expense budget

	1	2	Six months
Budgeted unit Sales	432600	464100
Variable selling and administrative expense
Sales commission	21630	23205	44835
Delivery expense	8652	9282	17934
Advertising	12978	13923	26901
Total Variable selling and administrative expense	43260	46410	89670
Fixed selling and administrative expense
Sales salaries	10000	10000	20000
Office salaries	6130	6130	12260
Depreciation	4760	4760	9520
Insurance	2010	2010	4020
Utilities	820	820	1640
Repair expense	610	610	1220
Total fixed selling and administrative expense	24330	24330	48660
Total Selling and administrative expense	67590	70740	138330