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1) Kapital, Inc. has prepared the operating budget for the first quarter of the year. The company forecast sales of $45,000 in January, $55,000 in February, and $65,000 in March. Variable and fixed selling and administrative expenses are as follows: Variable Expenses: Power cost (40% of sales) Miscellaneous expenses: (10% of sales) Fixed Expenses: Salary expense: $10,000 per month Rent expense: $4,000 per month Depreciation expense: $1,400 per month Power cost/fixed portion: $800 per month Miscellaneous expenses/fixed portion: $1,000 per month Calculate total selling and administrative expenses for the month of January.
Expert Answer
| Calculation of total selling & administrative expenses | ||
| January | ||
| sales | $45,000 | |
| Variable expenses | ||
| Power cost (45000*40%) | 18000 | |
| Miscelleneous expenses (45000*10%) | $4,500 | |
| Total variable S & A expenses V | 22500 | |
| Fixed expenses | ||
| Salary expenses | $10,000 | |
| Rent expenses | 4000 | |
| Depreciation expenses | 1400 | |
| Power cost | 800 | |
| Miscelleneous expenses | 1000 | |
| Total fixed S & A expenses F | $17,200 | |
| Total selling and administrative exp V+F | $39,700 | ans |
| If any doubt please comment. If satisfied you can rate the answer | ||
