Question

Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 4th QuarterBudgeted unit sales 17,000 20,000 16,000 15,000The company's variable selling and administrative expense per unit is $1.60. Fixed selling and administrative expenses include advertising expenses of $10,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $16,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $7,000 will be paid in the second quarterRequired:Prepare the company's selling and administrative expense budget for the upcoming fiscal year.

Answer 1

Answer and Explanation:

The preparation of the company selling and admin expense for the upcoming fiscal year is shown below:

Quarters

Particulars 1st 2nd 3rd 4th Year

Unit Sales 17000 20000 16000 15000 68000

Variable selling

and administrative

expense per unit $1.60 $1.60 $1.60 $1.60 $1.60

Variable selling

and administrative

expense $27,200 $32,000 $25,600 $24,000 $108,800

Fixed selling and administrative expense

Advertising $10,000 $10,000 $10,000 $10,000 $40,000

executive salaries $35,000 $35,000 $35,000 $35,000 $140,000

Depreciation $16,000 $16,000 $16,000 $16,000 $64,000

Insurance $5,000 $5,000 $10,000

Property taxes $7,000 $7,000

Total fixed selling

and administrative

expense $66,000 $68,000 $66,000 $61,000 $261,000

Total

selling and

administrative

expense $93,200 $100,000 $91,600 $85,000 $369,800

Less:

Depreciation -$16,000 -$16,000 -$16,000 -$16,000 -$64,000

Cash

disbursement

for selling and

administrative

expenses $77,200 $84,000 $75,600 $69,000 $305,800