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 Research and development expense Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 4 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31 Line Item Description Total sales Variable cost: Sales commissions Advertising expense Miscellaneous administrative expense Customer support expenses Total variable cost 14% of sales 18% of sales $7,000 per month plus 12% of sales $28,000 per month $13,000 per month plus 20% of sales $31,000 per month Fixed cost: Amount Amount Amount $400,000 $500,000 $600,000
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 Research and development expense Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 4 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31 Line Item Description Total sales Variable cost: Sales commissions Advertising expense Miscellaneous administrative expense Customer support expenses Total variable cost 14% of sales 18% of sales $7,000 per month plus 12% of sales $28,000 per month $13,000 per month plus 20% of sales $31,000 per month Fixed cost: Amount Amount Amount $400,000 $500,000 $600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Transcribed Image Text: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
14% of sales
18% of sales
$7,000 per month plus 12% of sales
$28,000 per month
$13,000 per month plus 20% of sales
$31,000 per month
Advertising expense
Miscellaneous administrative expense
Office salaries expense
Customer support expenses
Research and development expense
Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 4 as a model.)
Digital Solutions Inc.
Flexible Selling and Administrative Expenses Budget
For the Month Ending October 31
Line Item Description
Total sales
Variable cost:
Sales commissions
Advertising expense
Miscellaneous administrative expense
Customer support expenses
Total variable cost
✓
Total fixed cost
Fixed cost:
Miscellaneous administrative expense
✓
Office salaries expense
Customer support expenses -✓
Research and development expense
Feedback
✓
✓ Check My Work
Total selling and administrative expenses
Amount Amount
Amount
$400,000 $500,000 $600,000
$
$
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