Question

Exercise 8-6 Selling and Administrative Expense Budget [LO8-7]

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

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Budgeted unit sales	18,000	22,000	17,000	16,000

The company’s variable selling and administrative expense per unit is $1.70. Fixed selling and administrative expenses include advertising expenses of $11,000 per quarter, executive salaries of $38,000 per quarter, and depreciation of $17,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $8,200 will be paid in the second quarter.

Required:

	1 QT	2nd Qt	3rd QT	4th QT	YEAR
FILL IN BLANK
Variable selling and admin expense per unit
Variable selling and admin expense
Fixed selling and admin expenses
FILL IN BLANK
FILL IN BLANK
FILL IN BLANK
FILL IN BLANK
FILL IN BLANK
Total fixed selling and admin expenses
Total selling and admin expenses
FILL IN BLANK
Cash disbursement for selling and admin expenses

Answer 1

Required:

	1 QT	2nd Qt	3rd QT	4th QT	YEAR
Budgeted unit sales	18000	22000	17000	16000	73000
Variable selling and admin expense per unit	1.70	1.7	1.7	1.7	1.7
Variable selling and admin expense	30600	37400	28900	27200	124100
Fixed selling and admin expenses
Advertising expense	11000	11000	11000	11000	44000
Executive salaries	38000	38000	38000	38000	152000
Depreciation	17000	17000	17000	17000	68000
Insurance	4000		4000		8000
Income tax		8200			8200
Total fixed selling and admin expenses	70000	74200	70000	66000	280200
Total selling and admin expenses	100600	111600	98900	93200	404300
Less: Depreciation	-17000	-17000	-17000	-17000	-68000
Cash disbursement for selling and admin expenses	83600	94600	81900	76200	336300