Question

Budgeted sales for the month at 4,600 units. Budgeted variable selling and admin expense is $7.30 per unit. Budgeted fixed selling and admin expense is $51,980 of which $6,440 is depreciation. What is the budgeted cash disbursement amount for selling and administrative expense for the month?

Answer 1

$79,120

Step-by-step explanation:

Calculation for the budgeted cash disbursement amount for selling and administrative expense for the month

First step is to calculate the Total variable selling and administrative expense

Using this formula

Total variable selling and administrative expense= Budgeted unit sales for August × variable selling and administrative expense per unit

Let plug in the formula

Total variable selling and administrative expense= 4,600 × $7.30

Total variable selling and administrative expense= $33,580

Second step is to calculate the Total fixed selling and administrative expense

Total fixed selling and administrative expense

= Budgeted fixed selling and administrative expense - Depreciation per month

Let plug in the formula

Total fixed selling and administrative expense= $51,980 - $6,440

Total fixed selling and administrative expense=$45,540

Now let calculate the budgeted cash disbursement amount for selling and administrative expense for the month

Using this formula

Budgeted cash disbursement = Total variable selling and administrative expense + Total fixed selling and administrative expense

Let plug in the formula

Budgeted cash disbursement= $33,580 + $45,540

Budgeted cash disbursement= $79,120

Therefore the budgeted cash disbursement amount for selling and administrative expense for the month will be $79,120