Flexible budget for selling and administrative expenses for a service company Digital Solutions Inc. uses flexible budgets that are based on the following data: Line Item Description Value Sales commissions 14% of sales Advertising expense 20% of sales Miscellaneous administrative expense $8,500 per month plus 12% of sales Office salaries expense $28,000 per month Customer support expenses $14,000 per month plus 20% of sales Research and development expense $32,000 per month Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 4 as a model.) Digital Solutions Inc.Flexible Selling and Administrative Expenses BudgetFor the Month Ending October 31 Line Item Description Amount Amount Amount Total sales $400,000 $500,000 $600,000 Variable cost: $- Select - $- Select - $- Select - - Select - - Select - - Select - - Select - - Select - - Select - - Select - - Select - - Select - Total variable cost $Total variable cost $Total variable cost $Total variable cost Fixed cost: $- Select - $- Select - $- Select - - Select - - Select - - Select - - Select - - Select - - Select - - Select - - Select - - Select - Total fixed cost $Total fixed cost $Total fixed cost $Total fixed cost Total selling and administrative expenses $Total selling and administrative expenses $Total selling and administrative expenses $Total selling and administrative expenses

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 26BEB: Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes...

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Flexible budget for selling and administrative expenses for a service company

Digital Solutions Inc. uses flexible budgets that are based on the following data:

Line Item Description	Value
Sales commissions	14% of sales
Advertising expense	20% of sales
Miscellaneous administrative expense	$8,500 per month plus 12% of sales
Office salaries expense	$28,000 per month
Customer support expenses	$14,000 per month plus 20% of sales
Research and development expense	$32,000 per month

Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 4 as a model.)

Digital Solutions Inc.Flexible Selling and Administrative Expenses BudgetFor the Month Ending October 31

Line Item Description	Amount	Amount	Amount
Total sales	$400,000	$500,000	$600,000
Variable cost:
	$- Select -	$- Select -	$- Select -
	- Select -	- Select -	- Select -
	- Select -	- Select -	- Select -
	- Select -	- Select -	- Select -
Total variable cost	$Total variable cost	$Total variable cost	$Total variable cost
Fixed cost:
	$- Select -	$- Select -	$- Select -
	- Select -	- Select -	- Select -
	- Select -	- Select -	- Select -
	- Select -	- Select -	- Select -
Total fixed cost	$Total fixed cost	$Total fixed cost	$Total fixed cost
Total selling and administrative expenses	$Total selling and administrative expenses	$Total selling and administrative expenses	$Total selling and administrative expenses

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