Question

Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 4th QuarterBudgeted unit sales 17,000 20,000 16,000 15,000The company's variable selling and administrative expense per unit is $1.60. Fixed selling and administrative expenses include advertising expenses of $10,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $16,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $7,000 will be paid in the second quarterRequired:Prepare the company's selling and administrative expense budget for the upcoming fiscal year.

Answer 1

Answer and Explanation:

The preparation of the company selling and admin expense for the upcoming fiscal year is shown below:

                                                   Quarters

Particulars      1st             2nd         3rd         4th            Year

Unit Sales 17000 20000 16000 15000 68000

Variable selling

and administrative

expense per unit $1.60    $1.60      $1.60     $1.60          $1.60

Variable selling

and administrative

expense               $27,200   $32,000 $25,600 $24,000 $108,800

Fixed selling and administrative expense      

Advertising    $10,000   $10,000       $10,000   $10,000  $40,000

executive salaries $35,000 $35,000 $35,000 $35,000 $140,000

Depreciation $16,000 $16,000           $16,000   $16,000 $64,000

Insurance      $5,000                             $5,000                  $10,000

Property taxes              $7,000                                             $7,000

Total fixed selling

and administrative

expense         $66,000   $68,000    $66,000    $61,000  $261,000

Total

selling and

administrative

expense         $93,200    $100,000   $91,600    $85,000   $369,800

Less:

Depreciation  -$16,000   -$16,000      -$16,000  -$16,000  -$64,000

Cash

disbursement

for selling and

administrative

expenses          $77,200    $84,000   $75,600     $69,000   $305,800