Preparing a Selling and Administrative Expenses Budget Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of $19,200,000. There is a 5% commission on sales. In addition, fixed expenses of the sales and administrative offices include the following: Salaries Utilities Office space $960,000 365,000 230,000 Advertising 1,200,000 Required: Prepare a selling and administrative expenses budget for Fazel Company for the coming year.
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![Preparing a Selling and Administrative Expenses Budget
Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of $19,200,000. There is a 5%
commission on sales. In addition, fixed expenses of the sales and administrative offices include the following:
Salaries
Utilities
Office space
$960,000
365,000
230,000
Advertising
1,200,000
Required:
Prepare a selling and administrative expenses budget for Fazel Company for the coming year.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F18e7d4a0-940e-4ef2-867d-e81272548306%2Fa9b88758-52f1-4812-8fbe-85b410aa2ad8%2F3ktpa1_processed.jpeg&w=3840&q=75)
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- Shakira Inc. sells drones. The company is in the process of preparing its Selling and Administrative Expense Budget for the year. The following budget data are available: Variable Cost Per Drone Sold Monthly Fixed Cost Sales commissions $0.40 $ 12,000 Shipping 3.20 Advertising 0.25 Executive salaries 60,000 Depreciation on office equipment 4,000 Expenses are paid in the month incurred. If the company has budgeted to sell 20,000 drones in July, how much is the total budgeted selling and administrative expenses for July?Activity-Based Budget Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,210 for the Sleepeze, 12,420 for the Plushette, and 4,770 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: Salaries for his office (including himself at $62,800, a marketing research assistant at $41,200, and an administrative assistant at $23,900) are budgeted for $127,900 next year. Depreciation on the offices and equipment is $18,600 per year. Office supplies and other expenses total $19,550 per year. Advertising has been steady at $18,400 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 20 percent of first-year Ultima sales for a print and television campaign. Commissions on the Sleepeze and Plushette lines are 3 percent of sales. These…Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,600 March 13,600 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on…
- Preparing a Production Budget Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales: January 41,000 February 38,000 March 50,000 April 51,000 Patrick's policy is to have 17% of next month's sales in ending inventory. On January 1, it is expected that there will be 4,650 drums of solvent on hand. Required: Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total. If required, round your answers to the nearest whole unit. January February March 1st Quarter Total Sales fill in the blank 1 fill in the blank 2 fill in the blank 3 fill in the blank 4 Desired ending inventory fill in the blank 5 fill in the blank 6 fill in the blank 7 fill in the blank 8 Total needs fill in the blank 9 fill in the blank 10 fill in the blank 11 fill in the blank 12 Less: Beginning inventory fill in the blank 13…Dolson Appliances makes coffee machines for offices and homes. For next year, the production budget is 141,000 units. Beginning inventories will be 18,000 units and the desired ending inventory will be 16,000 units. Required: What is the sales budget for the coming year for Dolson Appliances? Sales budget unitsFlexible 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 14% of sales 18% of sales $5,500 per month plus 12% of sales $30,000 per month $12,000 per month plus 20% of sales $32,000 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 4 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget Line Item Description For the Month Ending October 31 Amount $400,000 Amount Amount $500,000 $600,000 Total sales Variable cost: Sales commissions 56,000 70,000 Advertising expense 72,000 90,000 Miscellaneous administrative expense 48,000 60,000 Customer support expenses 80,000 100,000 Total variable cost 256,000…
- Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,600 March 13,500 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on…Budgeted Income Statement Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $19,900,000 and cost of goods sold of $10,945,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $3,582,000. Total administrative expenses are expected to be $796,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: Question Content Area 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. Coral Seas Jewelry CompanyBudgeted Income StatementFor the Coming Year $- Select - - Select - Gross margin $fill in the blank 2306e2fe1072fa1_5 Less: $- Select - - Select - - Select - Operating income $fill in the blank 2306e2fe1072fa1_11 - Select - $- Select - Question Content Area 2. What if Coral Seas had…Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,500 March 13,000 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month's sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month's production needs. This is exactly the amount of material on hand on…
- Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,600 March 13,300 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on…Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,600 March 13,500 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on…Weller Company's budgeted unit sales for next year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 28,000 29,000 21,000 Budgeted unit sales The company's variable selling and administrative expense per unit is $2.70. Fixed selling and administrative expenses include advertising expenses of $13,000 per quarter, executive salaries of $47,000 per quarter, and depreciation of $27,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $6,800 will be paid in the second quarter. Required: Prepare the company's selling and administrative expense budget for next year. Note: Round "Per Unit" answers to 2 decimal places. Variable selling and administrative expense per unit Variable selling and administrative expense Fixed selling and administrative expenses: 4th Quarter 26,000 Total fixed selling and administrative expenses Total selling and administrative expenses Weller Company…
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