Question

Weller Company's budgeted unit sales for the upcoming fiscal year are provided below:

Budgeted unit sales

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

15,000 16,000 14,000 13,000

The company’s variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $8,000 will be paid in the second quarter.

Required:

Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Per Unit" answers to 2 decimal places.)

Answer 1

Weller Company
Selling and Administrative Expense Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units (a)	15,000	16,000	14,000	13,000	58,000
Variable selling and administrative expense per unit (b)	$2.50	$2.50	$2.50	$2.50	$2.50
Total Variable selling and administrative expense (a x b) = (c )	$37,500	$40,000	$35,000	$32,500	$145,000
Fixed selling and administrative expenses:
Advertising expense	$8,000	$8,000	$8,000	$8,000	$32,000
Executive salaries	$35,000	$35,000	$35,000	$35,000	$140,000
Insurance payments	$5,000		$5,000		$10,000
Property taxes		$8,000			$8,000
Depreciation	$20,000	$20,000	$20,000	$20,000	$80,000
Total Fixed selling and administrative expenses (d)	$68,000	$71,000	$68,000	$63,000	$270,000
Total selling and administrative expenses (c+d)	$105,500	$111,000	$103,000	$95,500	$415,000