Question

Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 3,600 units are planned to be sold in March. The variable selling and administrative expense is $4.10 per unit. The budgeted fixed selling and administrative expense is $35,860 per month, which includes depreciation of $5,100 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:

Answer 1

Answer:

$45,520

Explanation:

Given that

Sales budget = 3,600 units

Variable selling and administrative expense = $4.10

Fixed selling  and administrative expenses = $35,860

Depreciation expenses = $5,100

The computation of selling and administrative expenses is shown below:-

= Variable selling and administrative expenses + (Fixed selling  and administrative expenses - Depreciation expenses)

= (3,600 unit × $4.10) + ($35,860 - $5,100)

= $14,760 + $30,760

= $45,520