Chapter 14, Problem 14.3ME

Mini-Exercise 14.3

LO 6

Operating expense budget In addition to the information presented in Mini-Exercise 14.1, the following cost behavior patterns are budgeted for ABC Company’s operating expenses each month:

Fixed costs: salaries, $2,000; rent, $5,000; depreciation, $2,400; advertising, $3,200

Mixed costs: utilities, $3,000 + $0.50 per unit

Variable costs per unit sold: sales commissions, $2.00; marketing promotions, $1.00; supplies, $0.75; had debt expense, $0.25

Required:

Prepare ABC Company’s operating expense budget for June, July, and August.