Question

Flexible Budget for Selling and Administrative Expenses

Fuller Enterprises uses flexible budgets that are based on the following data:

Sales commissions	5% of sales
Advertising expense	25% of sales
Customer support expense	$2,700 plus 3% of sales
Office salaries expense	$18,000 per month
Miscellaneous administrative expense	$3,000 plus 2% of sales
Research and development expense	$1,900 per month

Prepare a flexible selling and administrative expenses budget for July for sales volumes of $120,000, $150,000, and $180,000. (Use Exhibit 5 as a model.) Enter all amounts as positive numbers.

FULLER ENTERPRISES
Flexible Selling and Administrative Expenses Budget
For the Month Ending July 31
Total sales	$120,000	$150,000	$180,000
Variable cost:
	$	$	$
Total variable cost	$	$	$
Fixed cost:
	$	$	$
Total fixed cost	$	$	$
Total selling and administrative expenses	$	$	$

Answer 1

Prepare a flexible selling and administrative expenses budget for July for sales volumes of $120,000, $150,000, and $180,000. (Use Exhibit 5 as a model.) Enter all amounts as positive numbers.

FULLER ENTERPRISES
Flexible Selling and Administrative Expenses Budget
For the Month Ending July 31
Total sales	$120,000	$150,000	$180,000
Variable cost:
Sales commissions	$6000	$7500	$9000
Advertising expense	30000	37500	45000
Customer support expense	3600	4500	5400
Miscellaneous administrative expense	2400	3000	3600
Total variable cost	$42000	$52500	$63000
Fixed cost:
Customer support expense	$2700	$2700	$2700
Office salaries expense	18000	18000	18000
Miscellaneous administrative expense	3000	3000	3000
Research and development expense	1900	1900	1900
Total fixed cost	$25600	$25600	$25600
Total selling and administrative expenses	$67600	$78100	$88600