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Murphy Company Produces and Sells Only One Product,heavy-Duty Cargo Carriers

Question 170

Essay

Murphy Company produces and sells only one product,heavy-duty cargo carriers for trucks.The company is preparing its Selling and Administrative Expense Budget for the month.The following information has been provided to assist in the budgeting process.
 Variable Cost  Monthly  Per Unit Sold  Fixed Cost  Sales Commissions $.50 Shipping $5 Advertising $1.25$10,000 Executive Salaries $150,000 Depreciation on Office Equipment $10,000 Other $0.30$15,000\begin{array}{lll} &\textbf { Variable Cost } & \textbf { Monthly } \\&\underline{\textbf { Per Unit Sold }}&\underline{\textbf { Fixed Cost }} \\\text { Sales Commissions } & \$ .50 & \\\text { Shipping } & \$ 5 & \\\text { Advertising } & \$ 1.25 & \$ 10,000 \\\text { Executive Salaries } & & \$ 150,000 \\\text { Depreciation on Office Equipment } & & \$ 10,000 \\\text { Other } & \$ 0.30 & \$ 15,000\end{array}
All of these expenses except depreciation are paid in the month they are incurred.

Required:

If Murphy has budgeted to sell 5,000 units during July, prepare the Selling and Administrative Expense Budget for July.

Correct Answer:

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