Question

Danzi, Inc., has budgeted sales for the month of July and estimated cost behavior patterns for a number of its expenses listed below. From this information prepare an operating expense budget for the month of July.

Budgeted sales revenue	$	230,000
Budgeted sales		4,600	units
Budgeted production		4,900	units
(Partial listing of expense items):
Sales commission		5	% of sales
Sales salaries	$	6,800
Production supervisor salaries		7,600
Administrative salaries		9,400
Administrative expense		8,000
Marketing promotions	$	0.75	per unit
Depreciation on plant equipment	$	5,000
Depreciation on office equipment		2,500
Raw materials used	$	7.50	per unit
Advertising	$	4,200
Delivery expense	$	0.50	per unit
Bad debt expense		1	% of sales
Property taxes on plant	$	5,000
Property taxes on office	$	3,000

Answer 1

Danzi, Inc., has budgeted sales for the month of July and estimated cost behavior patterns for a number of its expenses listed below.