Question

Zhang Industries sells a product for $700 per unit. Unit sales for May were 400, and each month's unit sales are expected to grow by 3%. Zhang pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales. Compute the budgeted selling expense for the manager for the month ended June 30.

Answer 1

Zhang Industries

The Budgeted selling expense for the manger for the month ended June 30 is:

= $8,768.

Step-by-step explanation:

a) Data and Calculations:

Selling price per unit = $700

Unit sales for May = 400

Expected growth of unit sales each month = 3%

Unit sales for June = 412 (400 * 1.03)

Sales revenue for June = $288,400 ($700 * 412)

Monthly sales salary to the sales manager = $3,000

Monthly sales commission = 2% of sales

Budgeted selling expense for the manger for the month ended June 30:

Monthly sales salary to the sales manager = $3,000

Monthly sales commission = 2% of sales 5,768 ($288,400 * 2%)

Total selling expense for the month = $8,768