Schuepfer Incorporated bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 3,000 units are planned to be sold in March. The variable selling and administrative expense is $3.50 per unit. The budgeted fixed selling and administrative expense is $35,800 per month, which includes depreciation of $4,500 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 March selling and administrative expense budget should be:

Question

Quizplus · Accepted Answer

The total selling and administrative expense budget for March can be calculated as follows:

Variable selling and administrative expense = 3,000 units x $3.50 per unit = $10,500

Fixed selling and administrative expense = $35,800 - $4,500 (depreciation) = $31,300

Total selling and administrative expense budget = $10,500 (variable) + $31,300 (fixed) = $41,800

Therefore, the cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be $41,800.

Schuepfer Incorporated Bases Its Selling and Administrative Expense Budget on Budgeted