Question

Schuepfer Incorporated bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 1,800 units are planned to be sold in March. The variable selling and administrative expense is $4.90 per unit. The budgeted fixed selling and administrative expense is $35,680 per month, which includes depreciation of $3,300 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:

$41,200

Explanation:

The computation of the cash disbursements for selling and admin expense is shown below

= (Sales units × variable selling and administrative expense per unit) + Fixed selling and administrative expense - Depreciation expense  

= (1,800 units × $4.90) + $35,680 - $3,300

= $8,820  + $35,680 - $3,300

= $41,200

Hence, the cash disbursements for selling and admin expense is $41,200