Flexible Budget for Selling and Administrative Expenses for a Service CompanyDigital Solutions Inc. uses flexible budgets that are based on the following data:Sales commissions15% of salesAdvertising expense20% of salesMiscellaneous administrative expense$5,500 per month plus 12% of salesOffice salaries expense$29,000 per monthCustomer support expenses$12,000 per month plus 20% of salesResearch and development expense$31,000 per month Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)Digital Solutions Inc.Flexible Selling and Administrative Expenses BudgetFor the Month Ending October 31Total sales$400,000 $500,000 $600,000Variable cost:$4$$Total variable cost$Fixed cost:$$Total fixed cost$$Total selling and administrative expenses$$

Selling and administrative expenses refer to the total amount of non-production expenses i.e.…

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Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter22: Budgeting

Section: Chapter Questions

Problem 2E: Digital Solutions Inc. uses flexible budgets that are based on the following data: Prepare a...

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Flexible Budget for Selling and Administrative Expenses for a Service Company

Digital Solutions Inc. uses flexible budgets that are based on the following data:

Sales commissions	15% of sales
Advertising expense	20% of sales
Miscellaneous administrative expense	$5,500 per month plus 12% of sales
Office salaries expense	$29,000 per month
Customer support expenses	$12,000 per month plus 20% of sales
Research and development expense	$31,000 per month

Prepare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)
Digital Solutions Inc.
Flexible Selling and Administrative Expenses Budget
For the Month Ending October 31
Total sales
$400,000 $500,000 $600,000
Variable cost:
$4
$
$
Total variable cost
$
Fixed cost:
$
$
Total fixed cost
$
$
Total selling and administrative expenses
$
$

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