Question

Sheridan Company classifies its selling and administrative expense budget into variable and fixed components. Variable expenses are expected to be $27,360 in the first quarter, and $4,560 increments are expected in the remaining quarters of 2022. Fixed expenses are expected to be $45,600 in each quarter.

Prepare the selling and administrative expense budget by quarters and in total for 2022.

Answer 1

The selling and administrative expense budget for Sheridan Company in 2022 can be prepared by breaking down the expenses into variable and fixed components for each quarter. The total expenses for 2022 amount to $319,200.

Step-by-step explanation:

The selling and administrative expense budget for Sheridan Company in 2022 can be prepared by breaking down the expenses into variable and fixed components for each quarter. Here's how:

Quarter 1:

• Variable expenses: $27,360
• Fixed expenses: $45,600
• Total expenses: $27,360 (variable) + $45,600 (fixed) = $72,960

Quarter 2:

• Variable expenses: $27,360 + $4,560 = $31,920
• Fixed expenses: $45,600
• Total expenses: $31,920 (variable) + $45,600 (fixed) = $77,520

Quarter 3:

• Variable expenses: $31,920 + $4,560 = $36,480
• Fixed expenses: $45,600
• Total expenses: $36,480 (variable) + $45,600 (fixed) = $82,080

Quarter 4:

• Variable expenses: $36,480 + $4,560 = $41,040
• Fixed expenses: $45,600
• Total expenses: $41,040 (variable) + $45,600 (fixed) = $86,640

In total for 2022, the selling and administrative expenses would amount to $72,960 + $77,520 + $82,080 + $86,640 = $319,200.