Question

Flexible Budget for Selling and Administrative Expenses for a Service Company 2. Cloud Productivity Inc. uses flexible budgets that are based on the following data: 15% of sales Sales commissions 3. Advertising expense 18% of sales 4 Miscellaneous administrative expense $8,500 per month plus 12 % of sales Office salaries expense $29,000 per month 5. $14,000 per month plus 20 % of sales Customer support expenses 6. Research and development expense $32,000 per month 7 Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.) 8. Cloud Productivity Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending March 31 9. Total sales $400000 $500000 $600000 Varlable cost: 10. Sales commisslons 11. Advertising expense Miscellaneous administrative expense Customer support expenses V Total variable cost

Answer 1

600000 Cloud Productivity Inc Flexible Selling and Administrative Expenses Budget For the Month Ending March 31 Total Sales 400000 500000 Variable Cost: Sales Commissions 60000 75000 Advertising expense 72000 90000 Miscellaneous administrative expense 48000 60000 Customer support expenses 80000 100000 Total variable cost 260000 325000 Fixed cost: Miscellaneous administrative expense 8500 8500 Office salaries expense 29000 29000 Customer support expenses 14000 14000 Research and development expense 32000 32000 Total Fixed Cost 83500 83500 Total selling and administrative expenses 343500) 408500 90000 108000 72000 120000 390000 8500 29000 14000 320001 83500 4735001