Question

Will’s Wheel Shop sells high-end bicycles. Although business has been good, Will is concerned that some of the company’s selling and administrative expenses are getting too high. He has asked you to help prepare a selling and administrative expense budget for him to review for the coming month. Another employee has accumulated information for you to use, but you should be careful because the employee does not know a lot about preparing this type of budget, so some items may not belong on the budget.
Direct labor ................ $2,500
Store rental ................ 1,200
Store supplies ................ 450
Sales commission .............. 925
Cost of bicycles .............. 5,600
Advertising in the local paper ......... 150
Insurance on bicycles in the store ....... 100
Shipping costs for bicycle parts Will ordered ... 135

Required
Prepare a selling and administrative expense budget with separate sections for variable and fixed expenses.



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  • CreatedMarch 11, 2015
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