Question

Sheffield & Crane Fabricators produces commemorative bricks that organizations use for fundraising projects. Matthew Sheffield, the company's vice president of marketing, has prepared the following sales forecast for the first six months of the coming year. The company plans to sell the bricks for $22 each.

January		February			March			April		May			June
25,000		28,000			32,000			34,000		26,000			35,000

Sheffield & Hill Fabricators' marketing department has identified the following monthly expenses that will be needed to support the company's sales and administrative functions.

Depreciation		$14,000
Sales staff salaries		$21,000
Advertising		$2,100
Executive salaries		$37,000
Miscellaneous		$1,500

In addition to these monthly expenses, the company will pay a commission to its salespeople equal to 8% of the sales revenue from each brick sold. The company expects bad debt expense to be 2% of sales revenue.

Prepare Sheffield & Hill's selling and administrative expense budget for the first quarter of the coming year.

Answer 1