Question

Swenson's selling and administrative expenses include the following: (Click the icon to view the expenses.) Swenson, Inc., sells tire rims. Its sales budget and inventory, purchases, and cost of goods sold budget for the nine months ended September 30, 2018, follow: (Click the icon to view the sales budget and inventory, purchases, and cost of goods sold budget.) Prepare a selling and administrative expense budget for each of the three quarters of 2018 and totals for the nine-month period. Swenson, Inc. Selling and Administrative Expense Budget Nine Months Ended September 30, 2018 Quarter Quarter Ended Ended March 31 June 30 Quarter Ended Nine-month Total September 30 Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses Total selling and administrative expenses Swenson, Inc. Sales Budget Nine Months Ended September 30, 2018 Quarter Ended Nine-Month March 31 June 30 September 30 Total 44,000 $ 64,000 $ 54,000 $ 162,000 66,000 96,000 81,000 243,000 110,000 $ 160,000 $ 135,000 $ 405,000 Cash sales, 40% Credit sales, 60% Total sales Rent, $1,500 per month Salaries, $3,500 per month Commissions, 2% of sales Depreciation, $1,200 per month Miscellaneous expenses, 1% of sales Swenson, Inc. Inventory, Purchases, and Cost of Goods Sold Budget Nine Months Ended September 30, 2018 Quarter Ended Quarter Ended Quarter Ended March 31 June 30 September 30 Nine-Month Total $162,000 $44,000 $41,400 $64,000 $40,400 $54,000 $43,400 Cost of goods sold Plus: Desired ending merchandise inventory Total merchandise inventory required Less: Beginning merchandise inventory Budgeted purchases $85,400 $35,000 $50,400 $104,400 $41,400 $63,000 $97,400 $40,400 $57,000

Answer 1

Selling and administrative expense budget

	Quarter ended March 31	Quarter ended June 30	Quarter ended Sep 30	Nine month total
Variable expense
Commission	2200	3200	2700	8100
Miscellaneous expense	1100	1600	1350	4050
Total variable expense	3300	4800	4050	12150
Fixed expense
Rent	1500	1500	1500	4500
Salaries	3500	3500	3500	10500
Depreciation	1200	1200	1200	3600
Total fixed expense	6200	6200	6200	18600
Total selling and administrative expense	9500	11000	10250	30750