Roo Corporation budgeted sales of its product during the next fiscal year at 255,000 units,with a selling price of $30 each.Sales commissions run 5% of sales and other variable selling and administrative costs are 10% of sales.Fixed selling and administrative costs are estimated at $950,000.The budgeted selling and administrative costs for the next fiscal year are:

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The budgeted selling and administrative costs include both variable and fixed costs. Variable costs are 15% of sales (5% for commissions + 10% for other variable costs) and fixed costs are $950,000. Sales are 255,000 units at $30 each, totaling $7,650,000. Variable costs are 15% of $7,650,000, which is $1,147,500. Adding the fixed costs of $950,000 to the variable costs of $1,147,500 gives a total of $2,097,500.

Roo Corporation Budgeted Sales of Its Product During the Next