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Exercise 9-12 Kirkland Company combines its operating expenses for budget purposes in a selling and administrative...

Exercise 9-12

Kirkland 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: 20,800 units quarter 1; 22,100 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 $10,900, office salaries $6,160, depreciation $4,490, insurance $2,080, utilities $880, and repairs expense $670.
4. Unit selling price: $24.


Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.)

KIRKLAND COMPANY
Selling and Administrative Expense Budget

KIRKLAND COMPANY
Selling and Administrative Expense Budget

For the Quarter Ending June 30, 2020For the Six Months Ending June 30, 2020June 30, 2020

Quarter

1

2

Six Months

Budget Sales in Units
Variable Expenses
Sales Commissions $ $ $

Delivery Expense

Advertising

Total Variable
Fixed Expenses

Sales Salaries

Office Salaraies

Depreciation

Insurance

Utilities

Repair Expense

Total Fixed
Total Selling and Administrative Expenses $ $ $

Solutions

Expert Solution

Calculation:
Sales Commissions, Qtr 1 = 20,800 * $24 * 5% = $24,960
Sales Commissions, Qtr 2 = 22,100 * $24 * 5% = $26,520

Delivery Expense, Qtr 1 = 20,800 * $24 * 2% = $9,984
Delivery Expense, Qtr 2 = 22,100 * $24 * 2% = $10,608

Advertising, Qtr 1 = 20,800 * $24 * 3% = $14,976
Advertising, Qtr 2 = 22,100 * $24 * 3% = $15,912

jeff jeffy answered 3 years ago
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