question archive Net vision uses flexible budgets that are based on the following data: Sales commissions
Net vision uses flexible budgets that are based on the following data: Sales commissions
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Net vision uses flexible budgets that are based on the following data:
Sales commissions ............... 10% of sales
Advertising expense .............18% of sales
Miscellaneous selling expense ......... $ 2,800 per month plus 4% of sales
Office salaries expense .............. $ 18,000 per month
Office supplies expense ............. 3% of sales
Miscellaneous administrative expense ...... $2,200 per month plus 2% of sales
Prepare a flexible selling and administrative expenses budget for January 2012 for sales volumes of $ 100,000, $125,000 and $150,000.
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NET VISION |
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Flexible Selling and Administrative Expenses Budget |
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For the Month Ending January 31, 2012 |
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Total sales |
$100,000 |
$125,000 |
$150,000 |
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Variable cost: |
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Sales commissions |
$ 10,000 |
$ 12,500 |
$ 15,000 |
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Advertising expense |
18,000 |
22,500 |
27,000 |
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Miscellaneous selling expense |
4,000 |
5,000 |
6,000 |
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Office supplies expense |
3,000 |
3,750 |
4,500 |
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Miscellaneous administrative expense |
2,000 |
2,500 |
3,000 |
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Total variable cost |
$ 37,000 |
$ 46,250 |
$ 55,500 |
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Fixed cost: |
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Miscellaneous selling expense |
$ 2,800 |
$ 2,800 |
$ 2,800 |
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Office salaries expense |
18,000 |
18,000 |
18,000 |
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Miscellaneous administrative expense |
2,200 |
2,200 |
2,200 |
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Total fixed cost |
$ 23,000 |
$ 23,000 |
$ 23,000 |
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Total selling and administrative expenses |
$ 60,000 |
$ 69,250 |
$ 78,500 |
