Question

In: Accounting

A retailer has the following budgeted sales: May $3 000 000 June $2 500 000 July...

A retailer has the following budgeted sales:

May $3 000 000

June $2 500 000

July $2 200 000

August $2 800 000

The store employees earn fixed monthly salaries totalling $120 000 and 10% commissions of

current monthly sales. Disbursements are made semi- monthly, that is half to be paid a month

after salaries and commissions are earned. Other expenses are: Rent $30 000 paid 1st day of each

month miscellaneous expenses 6% of sales insurance $3 000 per month, related to a one year

policy that way paid on 2nd of January.

Depreciation $19 000 per month.

Required

a) Prepare an operating expenses budget for the months of June, July and August

b) Prepare a disbursement budget on the operating expenses for the same period in a) above.

Solutions

Expert Solution

OPERATING EXPENSES BUGET
\
JUNE
SELLING EXPENSES
SALARIES 120000
COMMISSION 250000
ADMINISRTIVE EXPENSES
RENT 3000
MISCELANEOUS 150000
INSURANCE 3000
DEPERICIATION 19000
TOTAL 545000
JULY
SELLING EXPENSES
SALARY 120000
COMISSION 220000
ADMINISTRRTIVE EXPENSES
RENT 3000
INSURANCE 3000
MISCELLANEOUS 132000
DEPRICIATION 19000
TOTAL 497000
AUGUST
SELLING EXPENSES
SALARY 120000
COMMISSION 280000
ADMINISTRATIVAE
RENT 3000
MISCELLANEOUS 168000
INSURANCE 3000
DEPRICIATION 19000
TOTAL 593000

DISBURSEMENT BUDGET ON OPERATING EXPENSES

JUNE

SALARY 120000(HALF OF MAY AND JUNE SALARY)

COMMISSION 2750000(HALF OF MAY AND JUNE COMMISSION)

RENT 3000

MISCELLANEOUS 150000

TOTAL 548000

JULY

SALARY 120000

COMMISSION 360000

RENT 3000

MISCELLENOUS 132000

TOTAL 615000

AUGUST

SALARY 120000

COMMISSION 250000

RENT 3000

MISCELLENEOUS 168000

TOTAL 541000

(INSURANCE IS PAID IN THE MONTH OF JANUVARY SO IT SHOULD NOT BE ADDED IN DISBURMENT)

ekkarill92 answered 2 years ago
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