Question

x-tel budgets sales of $64,000 for april, $120,000 for may, and $44,000 for june. sales commissions are 10% of sales dollars and the company pays a sales manager a salary of $6,400 per month. sales commissions and salaries are paid in the month incurred. prepare a selling expense budget for april, may, and june.

Answer 1

The selling expense budget for X-Tel includes a 10% sales commission on the sales dollars and a fixed salary for the sales manager each month. For April, the total is $12,800; for May, $18,400; and for June, $10,800.

Step-by-step explanation:

To prepare a selling expense budget for X-Tel for the months of April, May, and June, we need to calculate the sales commissions based on the given sales dollars and add the fixed salary of the sales manager for each month.

• April: Sales commissions = 10% of $64,000 = $6,400
  Sales manager salary = $6,400
  Total selling expenses = $6,400 (commissions) + $6,400 (salary) = $12,800
  
  
  
• May: Sales commissions = 10% of $120,000 = $12,000
  Sales manager salary = $6,400
  Total selling expenses = $12,000 (commissions) + $6,400 (salary) = $18,400
  
  
• June: Sales commissions = 10% of $44,000 = $4,400
  Sales manager salary = $6,400
  Total selling expenses = $4,400 (commissions) + $6,400 (salary) = $10,800

The total selling expense budget for X-Tel for April is $12,800, for May is $18,400, and for June is $10,800.