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: 20,800 units quarter 1; 22,000 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 $10,600, office salaries $6,370, depreciation $4,470, insurance $1,890, utilities $850, and repairs expense $670.
4.		Unit selling price: $23.

Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.)

Answer 1

Selling and Administrative Expense Budget
For the Six Months Ending June 30, 2020
	1	2	Six months
Budgeted Sales in Units	20800	22000
Variable Expenses:
Sales commissions	23920	25300	49220
Delivery expense	9568	10120	19688
Advertising	14352	15180	29532
Total Variable	47840	50600	98440
Fixed Expenses:
Sales salaries	10600	10600	21200
Office salaries	6370	6370	12740
Depreciation	4470	4470	8940
Insurance	1890	1890	3780
Utilities	850	850	1700
Repairs expense	670	670	1340
Total Fixed	24850	24850	49700
Total Selling and Administrative Expenses	72690	75450	148140