Question

Flexible budget for selling and administrative expenses for a service company

Digital Solutions Inc. uses flexible budgets that are based on the following data:

Sales commissions	9% of sales
Advertising expense	17% of sales
Miscellaneous administrative expense	$8,000 per month plus 5% of sales
Office salaries expense	$52,000 per month
Customer support expenses	$15,000 per month plus 29% of sales
Research and development expense	$76,000 per month

Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $800,000, and $1,100,000. (Use Exhibit 5 as a model.) Enter all amounts as positive numbers.

Digital Solutions Inc.
Flexible Selling and Administrative Expenses Budget
For the Month Ending October 31
Total sales	$400,000		$800,000		$1,100,000
Variable cost:
		$		$		$
Total variable cost		$		$		$
Fixed cost:
		$		$		$
Total fixed cost		$		$		$
Total selling and administrative expenses		$		$		$

Answer 1