A manufacturing company's budgeted income statement includes the following data: $\begin{array}{|l|r|r|r|r|}
\hline\text { Data extracted from budgeted } & & & \
\text { income statement } & \text { Mar } & \text { Apr } & \text { May } & \text { Jun }\
\hline \text { Sales revenue } & \$ 130,000 & \$ 80,000 & \$ 130,000 & \$ 120,000 \
\hline \text { Commission expense (15\% of } & & & & \
\hline \text { sales) } & 19,500 & 12,000 & 19,500 & 18,000 \
\hline \text { Salaries expense } & 33,000 & 33,000 & 33,000 & 33,000 \
\hline \begin{array}{l}
\text { Miscellaneous expense }-5 \% \text { of } \
\text { sales }
\end{array} & 6500 & 4000 & 6500 & 6000 \
\hline \text { Rent expense } & 3600 & 3600 & 3600 & 3600 \
\hline \text { Utilities expense } & 2300 & 2300 & 2300 & 2300 \
\hline \text { Insurance expense } & 2600 & 2600 & 2600 & 2600 \
\hline \text { Depreciation expense } & 4200 & 4200 & 4200 & 4200 \
\hline
\end{array}$
The budget assumes that 60% of commission expenses are paid in the month they are incurred and the remaining 40% are paid one month later.In addition,50% of salaries expenses are paid in the same month,and the remaining 50% are paid one month later.Miscellaneous expenses,rent expense,and utilities expenses are assumed to be paid in the same month in which they are incurred.Insurance has been paid in advance for the year on January 1.
Calculate total budgeted cash payments for selling and administrative expenses for the month of April.

Question

A manufacturing company's budgeted income statement includes the following data: $\begin{array}{|l|r|r|r|r|}
\hline\text { Data extracted from budgeted } & & & \
\text { income statement } & \text { Mar } & \text { Apr } & \text { May } & \text { Jun }\
\hline \text { Sales revenue } & \$ 130,000 & \$ 80,000 & \$ 130,000 & \$ 120,000 \
\hline \text { Commission expense (15\% of } & & & & \
\hline \text { sales) } & 19,500 & 12,000 & 19,500 & 18,000 \
\hline \text { Salaries expense } & 33,000 & 33,000 & 33,000 & 33,000 \
\hline \begin{array}{l}
\text { Miscellaneous expense }-5 \% \text { of } \
\text { sales }
\end{array} & 6500 & 4000 & 6500 & 6000 \
\hline \text { Rent expense } & 3600 & 3600 & 3600 & 3600 \
\hline \text { Utilities expense } & 2300 & 2300 & 2300 & 2300 \
\hline \text { Insurance expense } & 2600 & 2600 & 2600 & 2600 \
\hline \text { Depreciation expense } & 4200 & 4200 & 4200 & 4200 \
\hline
\end{array}$
 The budget assumes that 60% of commission expenses are paid in the month they are incurred and the remaining 40% are paid one month later.In addition,50% of salaries expenses are paid in the same month,and the remaining 50% are paid one month later.Miscellaneous expenses,rent expense,and utilities expenses are assumed to be paid in the same month in which they are incurred.Insurance has been paid in advance for the year on January 1.
Calculate total budgeted cash payments for selling and administrative expenses for the month of April.

Quizplus · Accepted Answer

For April, the total budgeted cash payments for selling and administrative expenses are calculated as follows:1. **Commission Expense for April**:    - 60% of April's commission expense is paid in April: $0.60 \times \$12,000 = \$7,200$   - 40% of March's commission expense is paid in April: $0.40 \times \$19,500 = \$7,800$   - Total commission paid in April = \$7,200 + \$7,800 = \$15,0002. **Salaries Expense for April**:    - 50% of April's salaries expense is paid in April: $0.50 \times \$33,000 = \$16,500$   - 50% of March's salaries expense is paid in April: $0.50 \times \$33,000 = \$16,500$   - Total salaries paid in April = \$16,500 + \$16,500 = \$33,0003. **Miscellaneous Expense for April**: Paid in the same month = \$4,0004. **Rent Expense for April**: Paid in the same month = \$3,6005. **Utilities Expense for April**: Paid in the same month = \$2,3006. **Insurance Expense for April**: Already paid in advance, so \$0 for April.Adding all these expenses together gives the total budgeted cash payments for selling and administrative expenses for April:- $ \$15,000 + \$33,000 + \$4,000 + \$3,600 + \$2,300 = \$57,900 $

A Manufacturing Company's Budgeted Income Statement Includes the Following Data