Question

Walnut has forecast sales for the next three months as follows: July 4,700 units, August 6,900 units, September 8,000 units. Walnut's policy is to have an ending inventory of 50% of the next month's sales needs on hand. July 1 inventory is projected to be 2,100 units. Selling and administrative costs are budgeted to be $16,000 per month plus $14 per unit sold. What are budgeted selling and administrative expenses for July?

• $143,500

• $77,300

• $84,700

• $81,800

Answer 1

Answer)

Calculation of budgeted selling and administrative expenses for July

Budgeted selling and administrative expenses = $ 16,000 + (Number of units budgeted to be sold X $ 14 per unit)

                                                                                      = $ 16,000 + (4,700 units X $ 14 per unit)

                                                                                      = $ 16,000 + $ 65,800

                                                                                       = $ 81,800

Therefore Budgeted selling and administrative expenses for July is $ 81,800.