Schuepfer Incorporated bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 1,300 units are planned to be sold in March. The variable selling and administrative expense is $4.20 per unit. The budgeted fixed selling and administrative expense is $19,240 per month, which includes depreciation of $3,380 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

Variable selling and administrative expenses = $4.20 x 1,300 = $5,460
Fixed selling and administrative expenses = $19,240 - $3,380 = $15,860 
Total cash disbursements = Variable selling and administrative expenses + Fixed selling and administrative expenses = $5,460 + $15,860 = $21,320. Therefore, the answer is D.

Schuepfer Incorporated Bases Its Selling and Administrative Expense Budget on Budgeted