Question

Flexible Budget for Selling and Administrative Expenses

Agent Blaze uses flexible budgets that are based on the following data:

Sales commissions	6% of sales
Advertising expense	15% of sales
Miscellaneous selling expense	$2,050 plus 3% of sales
Office salaries expense	$14,000 per month
Office supplies expense	4% of sales
Miscellaneous administrative expense	$1,450 per month plus 2% of sales

Prepare a flexible selling and administrative expenses budget for January 2016, for sales volumes of $90,000, $115,000, and $135,000. (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

$90,000

$115,000

$135,000

Variable cost:

sales commision $___ $___ $___

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$___ $___ $___

Total selling and administrative expenses$___ $___ $___

Answer 1

Agent Blaze
Flexible Selling and Administrative Expenses Budget
For the Month Ending January 31, 2016
Total sales	90000	115000	135000
Variable cost:
Sales commision	5400	6900	8100
Advertising expense	13500	17250	20250
Miscellaneous selling expense	2700	3450	4050
Office supplies expense	3600	4600	5400
Miscellaneous administrative expense	1800	2300	2700
Total variable cost	27000	34500	40500
Fixed cost:
Miscellaneous selling expense	2050	2050	2050
Office salaries expense	14000	14000	14000
Miscellaneous administrative expense	1450	1450	1450
Total fixed cost	17500	17500	17500
Total selling and administrative expenses	44500	52000	58000