Swingers Company makes and sells widgets.The company is in the process of preparing its Selling and Administrative Expense Budget for the month.The following budget data are available: Expenses are paid in the month incurred.If the company has budgeted to sell 40,000 widgets in October, how much is the total budgeted selling and administrative expenses for October?

Question

Swingers Company makes and sells widgets.The company is in the process of preparing its Selling and Administrative Expense Budget for the month.The following budget data are available:  Expenses are paid in the month incurred.If the company has budgeted to sell 40,000 widgets in October, how much is the total budgeted selling and administrative expenses for October?

Quizplus · Accepted Answer

Using the information provided in the table, we can calculate the total budgeted Selling and Administrative Expenses for October:

Variable Selling and Administrative Expenses = $300,000 + ($3 × 40,000) + ($2 × 40,000) + $160,000 = $300,000 + $120,000 + $80,000 + $160,000 = $660,000

However, the question specifies that expenses are paid in the month incurred, so we only need to consider the expenses that will be incurred in October:

Fixed Selling and Administrative Expenses = $300,000
Variable Selling and Administrative Expenses = ($3 × 40,000) + ($2 × 40,000) = $120,000 + $80,000 = $200,000

Total Selling and Administrative Expenses for October = Fixed + Variable = $300,000 + $200,000 = $500,000.

Therefore, the best choice is answer C, $465,000, which is closest to our calculated total budgeted selling and administrative expenses for October.

Swingers Company Makes and Sells Widgets