Flexible budget for selling and administrative expenses for a service company Digital Solutions Inc. uses flexible budgets that are based on the following data: Sales commissions Advertising expense Miscellaneous administrative expense Office salaries expense Customer support expenses 8% of sales 15% of sales $10,000 per month plus 4% of sales $50,000 per month $20,000 per month plus 30% of sales Research and development expense $75,000 per month Prepare a flexible selling and administrative expenses budget for October for sales volumes of $500,000, $750,000, and $1,000,000. (Use Exhibit 4 as a model.) Flexible Selling and Administrative Expenses Budget Digital Solutions Inc. For the Month Ending October 31 Amount $500,000 Amount $750,000 Amount $1,000,000 Line Item Description Total sales Variable cost: Sales commissions 40,000 60,000 80,000 Advertising expense 75,000 112,500 150,000

Flexible budget for selling and administrative expenses for a service company Digital Solutions Inc. uses flexible budgets that are based on the following data: Sales commissions Advertising expense Miscellaneous administrative expense Office salaries expense Customer support expenses 8% of sales 15% of sales $10,000 per month plus 4% of sales $50,000 per month $20,000 per month plus 30% of sales Research and development expense $75,000 per month Prepare a flexible selling and administrative expenses budget for October for sales volumes of $500,000, $750,000, and $1,000,000. (Use Exhibit 4 as a model.) Flexible Selling and Administrative Expenses Budget Digital Solutions Inc. For the Month Ending October 31 Amount $500,000 Amount $750,000 Amount $1,000,000 Line Item Description Total sales Variable cost: Sales commissions 40,000 60,000 80,000 Advertising expense 75,000 112,500 150,000

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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Flexible Budget for Selling and Administrative Expenses for a Service Company
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