A manufacturing company budgets sales of $70,000 during July. It pays sales commissions of 5% of sales and also pays a sales manager a salary of $3,000 per month. Other monthly costs include depreciation on office equipment ($500), insurance expense ($200), advertising ($1,000), and an office manager salary of $2,500 per month. Compute the total (a) budgeted selling expense and (b) budgeted general and administrative expense for July.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
A manufacturing company budgets sales of $70,000 during July. It pays sales commissions of 5% of sales
and also pays a sales manager a salary of $3,000 per month. Other monthly costs include
office equipment ($500), insurance expense ($200), advertising ($1,000), and an office manager salary of
$2,500 per month. Compute the total (a) budgeted selling expense and (b) budgeted general and administrative
expense for July.
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