Question

Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available. 1. Sales: 20,700 units quarter 1; 22,500 units quarter 2. 2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%. 3. Fixed costs per quarter: sales salaries $10,300, office salaries $6,310, depreciation $4,350, insurance $1,650, utilities $890, and repairs expense $710. 4. Unit selling price: $24. Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.) KIRKLAND COMPANY Selling and Administrative Expense Budget Quarter Six Months

Answer 1

Answer

Selling and administrative expense Budget
For the period ended 30 June 2020
	Q1	Q2	Six Months
Budgeted sales in units	20700	22500
Variable expenses:
Sales Commission	$24,840	$27,000	$51,840
Delivery expenses	$9,936	$10,800	$20,736
Advertising	$14,904	$16,200	$31,104
Total Variables	$49,680	$54,000	$103,680
Fixed expenses:
Sales salaries	$10,300	$10,300	$20,600
Office Salaries	$6,310	$6,310	$12,620
Depreciation	$4,350	$4,350	$8,700
Insurance	$1,650	$1,650	$3,300
Utilities	$890	$890	$1,780
Repair expenses	$710	$710	$1,420
Total Fixed	$24,210	$24,210	$48,420
Total Selling & administrative expenses	$73,890	$78,210	$152,100

--Working

Variable expenses:
Sales Commission	=20700*24*5%	=22500*24*5%
Delivery expenses	=20700*24*2%	=22500*24*2%
Advertising	=20700*24*3%	=22500*24*3%