Question

Micro Miller Company’s budgeted sales for April were estimated at $700,000, sales commissions at 4% of sales, and the sales manager's salary at $80,000. Shipping expenses were estimated at 1% of sales and miscellaneous selling expenses were estimated at $1,000, plus 0.5% of sales. Determine the budgeted selling expenses on a flexible budget for April.

Answer 1

Answer:

$119,500

Explanation:

Solution:

Recall that

The budgeted sales for Micro Miller company = $700,000,

Sales commissions of = 4%

The salary of sales manager = $80,000.

Now,

Since Budgeted Sales is $700,000

Then

sales commissions is calculated as follows:

Sales Commission=0.04*700000(A)= 28000

Thus,

Sales Manager's Salary(B) = $80,000

Hence,

The shipping expenses = 0.01*700000 = $7000

Miscellaneous selling expenses becomes

Fixed = 1000

Variable =3500 700000 * 0. 5 = 119500

Answer 2

The budgeted selling expenses on a flexible budget for April is $119,500.

• The calculation is as follows:

Sales commission $28,000  (4% of $700,000)

Sales manager salary  $80,000

Shipping expenses  $7,000  (1% of $700,000)

Miscellaneous selling expenses

Fixed  $1,000

Variable  $3,500  (0.5% of $700,000)

Budgeted selling expenses  $119,500

Therefore we can conclude that The budgeted selling expenses on a flexible budget for April is $119,500.

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