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 6% of sales Advertising expense 17% of sales Miscellaneous administrative expense $12,000 per month plus 3% of sales Office salaries expense $52,000 per month Customer support expenses $20,000 per month plus 30% of sales Research and development expense $78,000 per month This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Prepare a flexible selling and administrative expenses budget for October for sales volumes of $600,000, $800,000, and $1,200,000. (Use Exhibit 5 as a model.) Enter all amounts as positive numbers.
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.
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 | 6% of sales |
| Advertising expense | 17% of sales |
| Miscellaneous administrative expense | $12,000 per month plus 3% of sales |
| Office salaries expense | $52,000 per month |
| Customer support expenses | $20,000 per month plus 30% of sales |
| Research and development expense | $78,000 per month |
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
Prepare a flexible selling and administrative expenses budget for October for sales volumes of $600,000, $800,000, and $1,200,000. (Use Exhibit 5 as a model.) Enter all amounts as positive numbers.
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