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Elena-2011 [213]
3 years ago
6

Windathon, Inc. expects sales volume totaling $500,000 for June. Data for the month follows:

Business
1 answer:
ivann1987 [24]3 years ago
8 0

Answer:

Here the variable cost can be computed using the following formula:

Variable cost = (Sales commissions  + Shipping expense + Miscellaneous selling expenses) ×Sales

Variable cost = (4% + 1% + 3/4%) x $500,000 = $28,750

Fixed cost = Sales manager's salary + Advertising expense + Miscellaneous selling expenses

= $30,000 + $25,000 + $2,100

= $57,100

<em>Total selling expense budget = Variable cost + Fixed cost</em>

<em>= $28,750 + $57,100 </em>

<em>= $85,850</em>

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Expenses  9000000   9000000          0               0.34                  0

Profit        3000000    2000000    -1000000      0.34            -340000

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