Question

Weller Company's budgeted unit sales for the upcoming fiscal year are provided below:

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Budgeted unit sales	35,000	37,000	28,000	33,000

The company’s variable selling and administrative expense per unit is $3.40. Fixed selling and administrative expenses include advertising expenses of $12,000 per quarter, executive salaries of $53,000 per quarter, and depreciation of $34,000 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 $8,200 will be paid in the second quarter.

Required:

Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Per Unit" answers to 2 decimal places.)

Answer 1

Solution:

Weller company
Selling and Administrative Expense budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Budgeted unit sales	35000	37000	28000	33000	133000
Variable selling and administrative expense per unit	$3.40	$3.40	$3.40	$3.40	$3.40
Variable selling and administrative expense	$1,19,000	$1,25,800	$95,200	$1,12,200	$4,52,200
Fixed Selling and Administrative expenses:
Advertising Expense	$12,000	$12,000	$12,000	$12,000	$48,000
Executive salaries	$53,000	$53,000	$53,000	$53,000	$2,12,000
Depreciation	$34,000	$34,000	$34,000	$34,000	$1,36,000
Insurance Payment	$5,000		$5,000		$10,000
Property Taxes		$8,200			$8,200
Total Fixed Selling and Administrative expenses	$1,04,000	$1,07,200	$1,04,000	$99,000	$4,14,200
Total Selling and Administrative expenses	$2,23,000	$2,33,000	$1,99,200	$2,11,200	$8,66,400
Less: Depreciation	$34,000	$34,000	$34,000	$34,000	$1,36,000
Cash Disbursements for selling & Adm. Expenses	$1,89,000	$1,99,000	$1,65,200	$1,77,200	$7,30,400