Chapter 22

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Question 10 Your answer is partially correct. Try again. Sunland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available. 1. Sales: 20,500 units quarter 1; 22,200 units quarter 2. 2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%. 3. Fixed costs per quarter: sales salaries $10,100, office salaries $6,490, depreciation $4,420, insurance $1,950, utilities $860, and repairs expense $660. 4. Unit selling price: $23. Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.) SUNLAND COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2020 Quarter 1 2 Six Months Budgeted Sales in Units 20500 22200 Variable Expenses Sales Commissions 1025 1110 2135 X Delivery Expense 410 444 854 X X X Advertising 615 666 1281 x Total Variable 2050 2220 4270 Fixed Expenses Sales Salaries 10100 10100 20200 Office Salaries 6490 6490 12980 Depreciation 4420 4420 8840 Insurance 1950 1950 3900 Utilities 860 860 1720 Repairs Expense 660 660 1320 Total Fixed 24480 24480 48960 x Total Selling and Administrative Expenses 26530 26700 53230