Zelia,Inc.has prepared the operating budget for the first quarter of the year.The company forecast sales of $40,000 in January,$50,000 in February,and $60,000 in March.Variable and fixed expenses are as follows:
Variable Expenses:
Power cost (40% of sales)
Miscellaneous expenses: (15% of sales)
Fixed Expenses:
Salaries expense: $6000 per month
Rent expense: $5000 per month
Depreciation expense: $1400 per month
Power cost/fixed portion: $600 per month
Miscellaneous expenses/fixed portion: $1200 per month
Using the information above,calculate the amount of budgeted selling and administrative expenses for the month of February.

Question

Zelia,Inc.has prepared the operating budget for the first quarter of the year.The company forecast sales of $40,000 in January,$50,000 in February,and $60,000 in March.Variable and fixed expenses are as follows: 
Variable Expenses:
Power cost (40% of sales)
Miscellaneous expenses: (15% of sales)
Fixed Expenses:
Salaries expense: $6000 per month
Rent expense: $5000 per month
Depreciation expense: $1400 per month
Power cost/fixed portion: $600 per month
Miscellaneous expenses/fixed portion: $1200 per month
Using the information above,calculate the amount of budgeted selling and administrative expenses for the month of February.

Quizplus · Accepted Answer

To calculate the budgeted selling and administrative expenses for February, we need to first calculate the variable expenses for February:

Power cost: 40% of $50,000 = $20,000
Miscellaneous expenses: 15% of $50,000 = $7,500
 
Total variable expenses = $20,000 + $7,500 = $27,500

Next, we need to calculate the total fixed expenses for February:

Salaries expense: $6,000
Rent expense: $5,000
Depreciation expense: $1,400
Power cost (fixed portion): $600
Miscellaneous expenses (fixed portion): $1,200

Total fixed expenses = $6,000 + $5,000 + $1,400 + $600 + $1,200 = $14,200

Finally, we can calculate the budgeted selling and administrative expenses for February:

Total expenses = variable expenses + fixed expenses
Total expenses = $27,500 + $14,200
Total expenses = $41,700

Therefore, the correct answer is D.

Zelia,Inchas Prepared the Operating Budget for the First Quarter of the Year.The