Comma Co.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: $\begin{array}{lcr}
\underline{ \text {tem }} &\underline{ \text { Variable Cost Per Unit Sold }} &\underline{ \text { Monthly Fixed Cost }} \
\text { Sales commissions } & \$ 1 & \$ 10,000 \
\text { Shipping } & \$3 & \
\text { Advertising } & \$4 & \
\text { Executive salaries } & & \$120,000\
\text { Depreciation on office equipment } & & \$4,000\
\text { Other }&\$2&\$6,000
\end{array}$
Expenses are paid in the month incurred.If the company has budgeted to sell 80000 widgets in October how much is the total budgeted selling and administrative expenses for October?

Question

Comma Co.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: $\begin{array}{lcr} 
\underline{ \text {tem }} &\underline{ \text { Variable Cost Per Unit Sold }} &\underline{ \text { Monthly Fixed Cost }} \
\text { Sales commissions } & \$ 1 & \$ 10,000 \
\text { Shipping } & \$3 & \
\text { Advertising } & \$4 & \
\text { Executive salaries } & & \$120,000\
\text { Depreciation on office equipment } & & \$4,000\
\text { Other }&\$2&\$6,000
\end{array}$
 Expenses are paid in the month incurred.If the company has budgeted to sell 80000 widgets in October how much is the total budgeted selling and administrative expenses for October?

Quizplus · Accepted Answer

Total variable cost per unit sold = $1 + $3 + $4 + $2 = $10Total variable cost = $10 * 80,000 units = $800,000Total fixed cost = $10,000 + $120,000 + $4,000 + $6,000 = $140,000Total budgeted selling and administrative expenses = $800,000 + $140,000 = $940,000

Comma CoMakes and Sells Widgets Expenses Are Paid in the Month Incurred