The International Company makes and sells only one product. There are 2 divisions, one in France and one in Newcastle.
The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:
French Division Cost Structure

Newcastle Division Cost Structure

- All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the French Division has budgeted to sell 20,000 units in October, then the total budgeted variable selling and administrative expenses for October will be

A)£53,000
B)£46,000
C)£66,250
D)£82,000

Question

The International Company makes and sells only one product. There are 2 divisions, one in France and one in Newcastle.
The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:
French Division Cost Structure

Newcastle Division Cost Structure

- All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the French Division has budgeted to sell 20,000 units in October, then the total budgeted variable selling and administrative expenses for October will be

A)£53,000 
B)£46,000 
C)£66,250 
D)£82,000

Quizplus · Accepted Answer

The total budgeted variable selling and administrative expenses for October will be £53,000. This is because the variable selling and administrative expenses are paid in cash in the month they are incurred, and the French Division has budgeted to sell 20,000 units in October. The variable selling and administrative expenses per unit are £2.65, so the total variable selling and administrative expenses for October will be 20,000 units * £2.65 per unit = £53,000.

The International Company Makes and Sells Only One Product