Delivery and commission expenses vary proportionally with budgeted sales in dollars. Advertising and office expenses are fixed. Miscellaneous expenses include $5,000 of fixed costs. The rest varies with budgeted sales in dollars. The Year 2 budgeted sales is $5,000,000. Budgeted sales Selling costs: Delivery expenses Commission expenses Advertising expenses Office expenses Miscellaneous expenses $1,250,000 $25,000 $30,000 $10,000 $6,000 $15,000 Total $121,000 What will be the value for commission expenses in the Year 2 selling & administrative expense budget? a. $ 24,000 O b. $120,000 O c. $122,000 O d. $102,000
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.
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