Flexible Budget for Selling and Administrative Expenses for a Service CompanyCloud Productivity Inc. uses flexible budgets that are based on the following data:Sales commissions15% of salesAdvertising expense20% of salesMiscellaneous administrative expense$5,000 per month plus 12% of salesOffice salaries expense$28,000 per monthCustomer support expenses$13,000 per month plus 20% of salesResearch and development expense$31,000 per monthPrepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)Cloud Productivity Inc.Flexible Selling and Administrative Expenses BudgetFor the Month Ending March 31Total sales$400000$500000$600000Variable cost: $$$ Total variable cost$$$Fixed cost: $$$ Total fixed cost$$$Total selling and administrative expenses$

Selling and Administration expense are operating expenses other than direct cost of production. This…

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 5P

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Flexible Budget for Selling and Administrative Expenses for a Service Company

Cloud Productivity Inc. uses flexible budgets that are based on the following data:

Sales commissions	15% of sales
Advertising expense	20% of sales
Miscellaneous administrative expense	$5,000 per month plus 12% of sales
Office salaries expense	$28,000 per month
Customer support expenses	$13,000 per month plus 20% of sales
Research and development expense	$31,000 per month

Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)

Cloud Productivity Inc.
Flexible Selling and Administrative Expenses Budget
For the Month Ending March 31
Total sales	$400000	$500000	$600000
Variable cost:
	$	$	$



Total variable cost	$	$	$
Fixed cost:
	$	$	$



Total fixed cost	$	$	$
Total selling and administrative expenses	$

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