Question

Terrible Two's Inc. combines its operating expenses for budget purposes in a selling and

administrative expenses budget. For the last six months of 2017, the following data are

available:

1. Sales: 31,500 units in Quarter 3; 51,500 units in Quarter 4

2. Variable costs per dollar of sales; sales commissions 2.40%; delivery expenses 3.45%;

and advertising 4.55%

3. Fixed costs per quarter: sales salaries $16,000; office salaries $3,050; depreciation

$4,350; insurance $2,500; utilities $400, and repairs $250

4. Unit selling price; $24.25

Could you help me prepare a selling and administrative expenses budget by quarter for the last six months of 2017?

Answer 1

sales amounts are basis for many other amounts, calculation of sales amounts:

Particulars	Quarter 1	Quarter 2
Sales	$         31,500	$             51,500
Selling price per unit	$           24.25	$               24.25
Sales in dollars	$       763,875	$       1,248,875

	Selling and administrative expenses budget
Ref	Particulars	Quarter 1	Quarter 2
a	Sales in dollars	763,875.00	1,248,875.00
b= a*2.4%	Sales commissions	18,333.00	29,973.00
c= a*3.45%	Delivery expenses	26,353.69	43,086.19
d= a*4.55%	Advertising	34,756.31	56,823.81
A	Total variable costs	79,443.00	129,883.00
	Fixed costs:
	Sales salaries	16,000.00	16,000.00
	Office salaries	3,050.00	3,050.00
	Depreciation	4,350.00	4,350.00
	Insurance	2,500.00	2,500.00
	Utilities	400.00	400.00
	Repairs	250.00	250.00
B	Total fixed costs	26,550.00	26,550.00
C= A+B	Total selling and administrative expenses	105,993.00	156,433.00

*Hope above explanation helps, please comment if further explanation is required. Your rating is appreciated*