Question

A company pays all selling expenses in the month incurred. Budget information includes: Administrative salaries: $50,000; Sales commissions: $20,000; Advertising: $10,000; Depreciation on store equipment: $25,000; Rent on administrative building: $30,000; Miscellaneous administrative expenses: $5,000. Total cash disbursements for selling expenses is $:_________.

Answer 1

$30,000

Step-by-step explanation:

total cash disbursements or outflows for selling expenses = sales commissions and advertising = $20,000 + $10,000 = $30,000

Administrative cash disbursements include administrative sales, rent and miscellaneous.

While depreciation is not considered a cash disbursement.

Answer 2

$30,000

Step-by-step explanation:

Selling Expenses = Sales commission + advertising

Given that

Sales commission = $20000

Advertising = $10000

Therefore,

Selling expenses = 20000 + 10000

= $30000

It is important to note that, the other expenses included there falls under the administrative expenses category.

Selling expenses are cost incurred in promoting and marketing products to customers. In other words, expenses associated with sales of goods.