Walnut has forecast sales for the next three months as follows: July 4,700 units, August 6,900...

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

Solutions

Expert Solution

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.

ekkarill92 answered 1 year ago

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