Question

The budgeted variable selling and administrative expense is calculated by multiplying the budgeted unit sales by the variable selling and administrative expense per unit.
a) true
b) false

Answer 1

Answer: True

Explanation:

Variable selling and administrative expenses increase with the number of sales so in order to get them, one needs to multiply the number of sales by the variable and administrative expenses.

This also goes for the budgeted variable selling expenses. To find out these costs, multiply the expected variable and admin expenses by the budgeted number of sales. The amount you get will show the amount of variable expenses to budget based on the sales you budgeted.