The selling and administrative expense budget of Ruffing Corporation is based on budgeted unit sales, which are 4,800 units for February. The variable selling and administrative expense is $8.10 per unit. The budgeted fixed selling and administrative expense is $71,520 per month, which includes depreciation of $16,800 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the February selling and administrative expense budget should be:
A)$38,880
B)$54,720
C)$110,400
D)$93,600

Question

Quizplus · Accepted Answer

The total selling and administrative expenses for February can be calculated as follows:

Variable expenses = $8.10 x 4,800 = $38,880
Fixed expenses (excluding depreciation) = $71,520 - $16,800 = $54,720
Total expenses = $38,880 + $54,720 = $93,600

Therefore, the cash disbursement for selling and administrative expenses on the February budget should be $93,600, which is option D.

The Selling and Administrative Expense Budget of Ruffing Corporation Is