Roufs Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 7,800 units are planned to be sold in April. The variable selling and administrative expense is $3.20 per unit. The budgeted fixed selling and administrative expense is $95,160 per month, which includes depreciation of $9,360 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the April selling and administrative expense budget should be:

Question

Quizplus · Accepted Answer

The cash disbursements exclude non-cash items like depreciation. Calculate variable expenses: 7,800 units * $3.20 = $24,960. Fixed expenses excluding depreciation: $95,160 - $9,360 = $85,800. Total cash disbursements: $24,960 + $85,800 = $110,760.

Roufs Inc Bases Its Selling and Administrative Expense Budget on Budgeted