Question

Is the following selling and administrative budget correct? If not, correct it

First 7. Selling and Administrative Budget Budgeted Sales Variable S&A rate Variable expenses Fixed S&A expenses Total S&A expenses Less: noncash expenses Cash S&A expenses 44,000 14.00 616,000 90,000 706,000 25,000 681,000 Second $ 82,000 $ 14.00 $ 1,148,000 $ 90,000 $ 1,238,000 $ 25,000 $ 1,213,000 Third $ $ $ $ $ $ $ 42,000 14.00 588,000 90,000 678,000 25,000 653,000 Fourth $ $ $ $ $ $ $ 76,000 14.00 1,064,000 90,000 1,154,000 25,000 1,129,000 Total $ $ $ $ $ $ $ 244,000 14.00 3,416,000 360,000 3,776,000 100,000 3,676,000

Answer 1

The Selling and Administrative Budget given is correct subject to the Budgeted Sales which should be units and not dollar values.

The Sales Budget also shows dollar values.

Ensure the Budgeted Sales is in units and then multiply with the Variable S&A rate to arrive at the Variable expenses.