Agent Blaze uses flexible budgets that are based on the foll

Agent Blaze uses flexible budgets that are based on the following data 24% of sales $2,350 plus 3% of sales $16,000 per month Office s Miscellaneous administrative expense Prepare a flexible selling and administrative expenses budget for January 2016, for sales volumes of $105,000, $130,000, and $160,000. (Use Exhibit 5 as a model.) Ente amounts as positive numbers. Agent Blaze Flexible Seling and Administrative Expenses Budget 31, 2016 130,000 $160,000 Total sales Variable cost $105,000 5,250 Advertising expense Office supplies expense Miscellaneous administrative expense Miscel laneous administrative expense

Solution

Agent Blaze Flexible Selling and Administrative Expenses Budget for the month ending Jan 31, 2016 Total Sales $105000 $130000 $160000 Variable Cost : $ $ $ Sales commission (WN-1) 5250 6500 8000 Advertising expenses (WN-2) 25200 31200 38400 Miscellaneous selling expenses (WN-3) 3150 3900 4800 Office supplies expenses (WN-4) 4200 5200 6400 Miscellaneous administrative expenses (WN-5) 2100 2600 3200      Total Variable Cost (A) $39900 $49400 $60800 Fixed Cost : $ $ $ Miscellaneous selling expenses (WN-3) 2350 2350 2350 Office salaries expenses 16000 16000 16000 Miscellaneous administrative expenses (WN-5) 1700 1700 1700      Total Fixed Cost (B) $20050 $20050 $20050 Total selling and administrative expenses (A) + (B) $59950 $69450 $80850 Working Notes : WN-1 : Sales commission $105000 * 5% $130000 * 5% $160000 * 5% WN-2 : Advertising expenses $105000 * 24% $130000 * 24% $160000 * 24% WN-4 : Office supplies expenses $105000 * 4% $130000 * 4% $160000 * 4% WN-3 : Miscellaneous selling expenses : $ 2350 are to be taken as fixed costs and variable cost will be following : $105000 * 3% $130000 * 3% $160000 * 3% WN-5 : Miscellaneous administrative expenses : $1700 are fied cost and variable costs will be following : $105000 * 2% $130000 * 2% $160000 * 2%