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 Advertising expense 18% of sales Miscellaneous administrative expense $6,500 per month plus 12% of sales Office salaries expense $28,000 per month Customer support expenses $13,000 per month plus 20% of sales Research and development expense $31,000 per month Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31 Total sales $400,000 $500,000 $600,000 Variable cost: Sales commissions Advertising expense Miscellaneous administrative expense v Customer support expenses v Total variable cost Fixed cost: Miscellaneous administrative expense v Office salaries expense v Customer support expenses Research and development expense Total fixed cost Total selling and administrative expenses
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 Advertising expense 18% of sales Miscellaneous administrative expense $6,500 per month plus 12% of sales Office salaries expense $28,000 per month Customer support expenses $13,000 per month plus 20% of sales Research and development expense $31,000 per month Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31 Total sales $400,000 $500,000 $600,000 Variable cost: Sales commissions Advertising expense Miscellaneous administrative expense v Customer support expenses v Total variable cost Fixed cost: Miscellaneous administrative expense v Office salaries expense v Customer support expenses Research and development expense Total fixed cost Total selling and administrative expenses
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
Advertising expense
18% of sales
Miscellaneous administrative expense
$6,500 per month plus 12% of sales
Office salaries expense
$28,000 per month
Customer support expenses
$13,000 per month plus 20% of sales
Research and development expense
$31,000 per month
Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)
Digital Solutions Inc.
Flexible Selling and Administrative Expenses Budget
For the Month Ending October 31
Total sales
$400,000 $500,000 $600,000
Variable cost:
Sales commissions
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
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