Question

The marketing and administrative expense budget of Frazier Corporation is based on budgeted unit sales, which are 5,500 units for June. The variable marketing and administrative expense is $1.00 per unit. The budgeted fixed marketing and administrative expense is $101,200 per month, which includes depreciation of $6,050 per month. The remainder of the fixed marketing and administrative expense represents current cash flows. The cash disbursements for marketing and administrative expenses on the June marketing and administrative expense budget should be____________.a. $100,650.b. $106,700.c. $5,500.d. $95,150

Answer 1

Answer: b. $106,700

Explanation:

The marketing and administrative expense budget is based on budgeted unit sales, which are 5,500 units for June.

The variable marketing and administrative expense is $1.00 per unit. Which is 5,500 units x $1.00 = $5,500.

The budgeted fixed marketing and administrative expense is $101,200.

To get the cash disbursements for marketing and administrative expenses on the June marketing and administrative expense budget should be Variable costs plus fixed costs.

= $5,500 + $101,200

= $106, 700