Asked by Jonathan Celestin on May 18, 2024
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The selling and administrative expense budget of Garney Corporation is based on the number of units sold, which are budgeted to be 1,800 units in October. The variable selling and administrative expense is $2.00 per unit. The budgeted fixed selling and administrative expense is $22,680 per month, which includes depreciation of $7,020. The remainder of the fixed selling and administrative expense represents current cash flows.Required:Prepare the selling and administrative expense budget for October.
Selling and Administrative Expense Budget
A detailed plan that estimates the expected selling and administrative expenses for a company over a specific period, helping in the management and planning of overhead costs.
Variable Expense
A cost that varies with the level of output or sales, such as raw materials or sales commissions.
Fixed Selling and Administrative Expense
Costs that do not change with the level of production or sales, such as salaries of executive personnel and advertising expenses.
- Calculate variable and fixed selling, and administrative expenses to prepare a comprehensive expense budget.
- Investigate how depreciation and additional non-cash costs influence budget formulation.
Verified Answer
Learning Objectives
- Calculate variable and fixed selling, and administrative expenses to prepare a comprehensive expense budget.
- Investigate how depreciation and additional non-cash costs influence budget formulation.
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