Wallen Company estimated sales of 12,000 units at $44 each, unit cost of goods sold of $22, marketing expense of $70,000, and a 12% commission on the price for each unit sold. Administrative expense is budgeted at $50,000.
-Refer to the Figure.What is Wallen's budgeted marketing expense?

Question

Quizplus · Accepted Answer

The budgeted marketing expense is directly given as $70,000, and the 12% commission on the price for each unit sold ($44) would be an additional expense. The commission per unit is $44 * 12% = $5.28. For 12,000 units, the total commission expense is $5.28 * 12,000 = $63,360. Adding this to the $70,000 marketing expense gives a total of $133,360.

Wallen Company Estimated Sales of 12,000 Units at $44 Each