Walnut has forecast sales for the next three months as follows: July 4,000 units,August 6,000 units,September 7,500 units.Walnut's policy is to have an ending inventory of 40% of the next month's sales needs on hand.July 1 inventory is projected to be 1,500 units.Selling and administrative costs are budgeted to be $15,000 per month plus $5 per unit sold.What are budgeted selling and administrative expenses for September?
A)$30,000
B)$67,500
C)$32,500
D)$52,500

Question

Quizplus · Accepted Answer

The budgeted selling and administrative expenses for September are calculated by adding the fixed costs ($15,000) to the variable costs ($5 per unit sold). For September, 7,500 units are sold, so the variable costs are 7,500 units * $5 = $37,500. Adding the fixed costs, the total is $15,000 + $37,500 = $52,500.

Walnut Has Forecast Sales for the Next Three Months as Follows