Answer:
Weller Company
Selling and Administrative Expense Budget for the upcoming year:
First Quarter
Variable = $302,400 (($2.80 x (29,000 + 30,000 +22,000 + 27,000))
Fixed:
Advertising = $56,000 ($14,000 x 4)
Executive Salaries = $188,000 ($47,000 x 4)
Depreciation = $112,000 ($28,000 x 4)
Insurance = $10,000 ($5,000 x 2)
Property Taxes = $7,800
Total = $672,200
Explanation:
A budget is a projection into the future about the activities of an entity. It is used for planning and decision making, especially when the budget is compared with the actual performances to obtain variances.
The total variable for the year is obtained by adding up the budgeted unit sales for the quarters and multiplying by the variable expense per unit.
The fixed costs total $373,800. The Advertising, Executive Salaries, and Depreciation costs would be incurred each quarter. So their sums were obtained by multiplying a quarter's total cost by 4.
Insurance cost would be incurred only in two quarters and Property Taxes in one quarter only.
