ABC Company's budgeted sales for June, July, and August are 16,000, 20,000, and 18,000 units respectively. The following cost behavior patterns are budgeted for ABC Company's operating expenses each month: Fixed costs: salaries, $4,000; rent, $7,000; depreciation, $4,400; advertising, $5,200 Mixed costs: utilities, $5,000+ $0.50 per unit Variable costs per unit sold: sales commissions, $4.00; marketing promotions, $3.00; supplies, $0.85; bad debt expense, $0.55 Required: Prepare ABC Company's operating expense budget for June, July, and August. July August Variable operating expenses: Sales commissions Marketing promotions Supplies Bad debts expense Utilities Total variable expense Fixed operating expenses: Salaries Rent Depreciation Advertising Utilities Total fixed expense Budgeted operating expense June

ABC Company's budgeted sales for June, July, and August are 16,000, 20,000, and 18,000 units respectively. The following cost behavior patterns are budgeted for ABC Company's operating expenses each month: Fixed costs: salaries, $4,000; rent, $7,000; depreciation, $4,400; advertising, $5,200 Mixed costs: utilities, $5,000+ $0.50 per unit Variable costs per unit sold: sales commissions, $4.00; marketing promotions, $3.00; supplies, $0.85; bad debt expense, $0.55 Required: Prepare ABC Company's operating expense budget for June, July, and August. July August Variable operating expenses: Sales commissions Marketing promotions Supplies Bad debts expense Utilities Total variable expense Fixed operating expenses: Salaries Rent Depreciation Advertising Utilities Total fixed expense Budgeted operating expense June

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 3PB: TIB makes custom guitars and prepared the following sales budget for the second quarter It also has...

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TIB makes custom guitars and prepared the following sales budget for the second quarter It also has this additional information related to its expenses: Direct material per unit $55, Direct labor per hour 20, Variable manufacturing overhead per hour 3.50, Fixed manufacturing overhead per month 3,000, Sales commissions per unit 20, Sales salaries per month 5,000, Delivery expense per unit 0.50, Utilities per month 4,000. Administrative salaries per month 20,000, Marketing expenses per month 8,000, Insurance expense per month 11,000, Depreciation expense per month 9,000. Prepare a sales and administrative expense budget for each month in the quarter ended June 30. 2018.
Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following. At the end of the year, actual sales revenue for Product R and Product S was 3,075,000 and 3,254,000, respectively. The actual price charged for Product R was 25 and for Product S was 20. Only 10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled 540,000 for this product. Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget. 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product?
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