Dart, Inc. makes and sells umbrellas. 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: $\begin{array}{lrr}&\text { Variable Cost Per Unit Sold }&\text { Monthly Fixed Cost }\
\text { Sales commissions } & \$ 0.60 & \$ 6,000 \
\text { Shipping } & 1.20 & \
\text { Advertising } & 0.30 &\
\text { Executive salaries } & &40,000 \
\text { Depreciation on office equipment } && 8,000\
\text { Other }&0.35&28,000
\end{array}$ Expenses are paid in the month incurred. If the company has budgeted to sell 8,000 umbrellas in October, how much is the total budgeted variable selling and administrative expenses for October?

Question

Quizplus · Accepted Answer

The total budgeted variable selling and administrative expenses for October can be calculated by adding the variable costs per unit sold for each category and then multiplying by the number of units (umbrellas) budgeted to be sold. The calculation is as follows: $(\$0.60 + \$1.20 + \$0.30 + \$0.35) \times 8,000 = \$2.45 \times 8,000 = \$19,600.$

Dart, Inc Makes and Sells Umbrellas Expenses Are Paid in the Month Incurred