Question

Exercise 9-12 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; 22,700 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 $10,900, office salaries $6,120, depreciation $4,740, insurance $1,640, utilities $880, and repairs expense $680. 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.) KIRKLAND COMPANY Selling and Administrative Expense Budget Quarter 1 2 Six Months

Answer 1

Selling and administrative expense budget

For the six month ended December 31,2020

	1	2	Six months
Sales revenue	476100	522100
Variable cost
Sales commission	23805	26105	49910
Delivery expense	9522	10442	19964
Advertising expense	14283	15663	29946
Total variable cost	47610	52210	99820
Fixed cost
Sales salaries	10900	10900	21800
Office salaries	6120	6120	12240
Depreciation	4740	4740	9480
Insurance	1640	1640	3280
Utilities	880	880	1760
repairs expense	680	680	1360
Total Fixed cost	24960	24960	49920
Total Cost	72570	77170	149740