Question

Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 2,000 units are planned to be sold in March. The variable selling and administrative expense is $4.70 per unit. The budgeted fixed selling and administrative expense is $35,700 per month, which includes depreciation of $3,500 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:

Answer 1

Total variable  selling and administrative expense=($4.7/unit*2000)=$9400

Add:Fixed  selling and administrative expense excluding depreciation=(35700-3500)=$32200

Cash disbursements for selling and administrative expenses=$41600.