Question

Preparing a Selling and Administrative Expenses Budget Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of $19,730,000. There is a 3% commission on sales. In addition, fixed expenses of the sales and administrative offices include the following: Salaries $ 960,000 Utilities 365,000 Office space 230,000 Advertising 1,200,000 Required: Prepare a selling and administrative expenses budget for Fazel Company for the coming year. Fazel Company Selling and Administrative Expenses Budget For the Coming Year Variable selling expenses $ Fixed expenses: Salaries $ Utilities Office space Advertising Total fixed expenses Total selling and administrative expenses $

Answer 1

Solution and Explanation:

The following is the selling and administrative expense structure of the Fazel company for the year. According to the given information and the data:

The Variable selling expenses (19730000* 3%) 591900

The Fixed Expenses

The Salaries expense 960000

The Utilities expense 365000

The Office space expense 230000

The Advertising expense 1200000

The Total Fixed expense 2755000

The Total selling & admin Expense 3346900

Note: the variable expense is calculated by multiplying the total sales given in the question with the percentage of the commission given