Kirkland Company combines its operating expenses for budget

Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 2 quarters of 2017, the following data are available.

Sales: $400,000 quarter 1; $440,000 units quarter 2.

Variable costs per dollar of sales total to 10% of sales 3. Fixed costs per quarter total to $27,000.  

Instructions

Prepare a selling and administrative expense budget for the first 2 quarters of 2017.

Solution

Quarter 1 Quarter 2 Budgeted sales in dollars 400000 440000 Variable expenses 40000 44000 Fixed costs 27000 27000 Total selling and administrative expenses 67000 71000