Question

Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of $19,730,000. There is a 3% commission on sales. In addition, fixed expenses of the sales and administrative offices include the following: Salaries $ 960,000 Utilities 365,000 Office space 230,000 Advertising 1,200,000 Prepare a selling administrative expense budget for the coming year.

Answer 1

Answer:

Selling administrative expense budget for the coming year is $3,346,900

Explanation:

In the coming year, Fazel expects total sales of $19,730,000. There is a 3% commission on sales.

Commission on sales expense = $19,730,000 x 3% = $591,900

Selling administrative expense budget for the coming year = Commission on sales expense + Salaries expense + Utilities expense + Office space expense + Advertising expense = $591,900 + $960,000 + $365,000 + $230,000 + $1,200,000 = $3,346,900