Final answer:
For May, estimated variable selling and administrative expenses are $35,700, based on unit sales. Fixed expenses are $80,000. Adding these together results in total estimated selling and administrative expenses of $115,700 for May.
Step-by-step explanation:
The question pertains to the calculation of selling and administrative expenses as part of a master budget for a manufacturing firm. The May budget calculation must account for variable expenses based on unit sales and fixed costs. Given the budgeted unit sales for May are 10,500 units and the variable selling and administrative expense is $3.40 per unit, we calculate the total variable expenses for May by multiplying the two, resulting in $35,700. To this, we add the fixed monthly expense of $80,000 to get the total estimated selling and administrative expenses for May.
Total Variable Expenses = Unit Sales for May * Variable Expense per Unit = 10,500 units * $3.40/unit = $35,700
Estimated Selling and Administrative Expenses for May = Total Variable Expenses + Fixed Expenses = $35,700 + $80,000 = $115,700