Daybreak Technologies Inc. uses flexible budgets that are based on the following data: Sales commissions 16% of sales Advertising expense 12% of sales Miscellaneous administrative expense $5,000 per month plus 10% of sales Office salaries expense $19,000 per month Customer support expenses $8,000 per month plus 18% of sales Research and development expense $22,000 per month Prepare a flexible selling and administrative expenses budget for April for sales volumes of $200,000, $300,000, and $400,000. Daybreak Technologies Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending April 30 Total sales $200,000 $300,000 $400,000 Variable cost: Sales commissions $4 Advertising expense Miscellaneous administrative expense Customer support expenses Total variable cost Fixed cost: Miscellaneous administrative expense Office salaries expense Customer support expenses Research and development expense Total fixed cost Total selling and administrative expenses $4

Daybreak Technologies Inc. uses flexible budgets that are based on the following data: Sales commissions 16% of sales Advertising expense 12% of sales Miscellaneous administrative expense $5,000 per month plus 10% of sales Office salaries expense $19,000 per month Customer support expenses $8,000 per month plus 18% of sales Research and development expense $22,000 per month Prepare a flexible selling and administrative expenses budget for April for sales volumes of $200,000, $300,000, and $400,000. Daybreak Technologies Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending April 30 Total sales $200,000 $300,000 $400,000 Variable cost: Sales commissions $4 Advertising expense Miscellaneous administrative expense Customer support expenses Total variable cost Fixed cost: Miscellaneous administrative expense Office salaries expense Customer support expenses Research and development expense Total fixed cost Total selling and administrative expenses $4

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Echo Amplifiers prepared the following sales budget for the first quarter of 2018: Jan. Feb. Mar. Units 900 1,300 1,400 Sales price $100 $100 $100 Budgeted sales $90,000 $130,000 $140,000 It also has this additional information related to its expenses: Direct material per unit $1.50 Direct labor per unit 2 Variable manufacturing overhead per hour 0.40 Fixed manufacturing overhead per month 3,000 Sales commissions per unit 16 Sales salaries per month 5,100 Delivery expense per unit 0.50 Factory utilities per month 4,000 Administrative salaries per month 20,000 Marketing expenses per month 7,000 Insurance expense per month 12,000 Depreciation expense per month 10,000 Prepare a sales and administrative expense budget for each month in the quarter ending March 31, 2018. Enter all amounts as positive numbers.
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Refer to the picture for the problem and template.
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Flexible Budget for Selling and Administrative Expenses for a Service Company
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