Question

Pearl, Inc. has prepared the operating budget for the first quarter of the year. The company forecast sales of $ 50 comma 000 in​ January, $ 60 comma 000 in​ February, and $ 70 comma 000 in March. Variable and fixed selling and administrative expenses are as​ follows: Variable​ Expenses: Power cost ​(20​% of​ sales) Miscellaneous​ expenses: ​(10​% of​ sales) Fixed​ Expenses: Salaries​ expense: $ 10 comma 000 per month Rent​ expense: $ 5 comma 000 per month Depreciation​ expense: $ 1 comma 400 per month Power​ cost/fixed portion: $ 600 per month Miscellaneous​ expenses/fixed portion: $ 1 comma 000 per month Calculate total budgeted selling and administrative expenses for the month of January.

Answer 1

$33,000

Step-by-step explanation:

The computation of the total budgeted selling and admin expenses is shown below:

Power - variable $10,000 ($50,000 × 20%)

Miscellaneous expenses – variable $5,000 ($50,000 × 10%)

Salary Expense $10,000

Rent Expense $5,000

Depreciation $1,400

Power – Fixed $600

Miscellaneous expenses – Fixed $1,000

Total selling and administrative expenses $33,000

We simply added the all selling and admin expenses i.e shown above