Question

For June, Bonita Industries estimated sales revenue at $700000. It pays sales commissions that are 4% of sales. The sales manager's salary is $275000, estimated shipping expenses total 1% of sales, and miscellaneous selling expenses are $20000. How much are budgeted selling expenses for the month of July if sales are expected to be $640000?

Answer 1

The budgeted selling expenses for the month of July are $327,000.

Step-by-step explanation:

To determine the budgeted selling expenses for the month of July, we need to calculate the different items that make up the selling expenses.

First, we calculate the sales commissions which are 4% of the expected sales for July. 4% of $640,000 is $25,600.

Next, we add the sales manager's salary, estimated shipping expenses, and miscellaneous selling expenses. The sales manager's salary is $275,000, estimated shipping expenses are 1% of sales ($6,400), and miscellaneous selling expenses are $20,000. $275,000 + $6,400 + $20,000 = $301,400.

Therefore, the budgeted selling expenses for the month of July are $25,600 + $301,400 = $327,000.