Flexible budget for selling and administrative expenses for a service company Digital Solutions Inc. uses flexible budgets that are based on the following data: Line Item Description Value Sales commissions 14% of sales Advertising expense 18% of sales Miscellaneous administrative expense $6,500 per month plus 12% of sales Office salaries expense $30,000 per month Customer support expenses $14,000 per month plus 20% of sales Research and development expense $30,000 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 4 as a model.)

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
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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:

Line Item Description Value
Sales commissions 14% of sales
Advertising expense 18% of sales
Miscellaneous administrative expense $6,500 per month plus 12% of sales
Office salaries expense $30,000 per month
Customer support expenses $14,000 per month plus 20% of sales
Research and development expense $30,000 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 4 as a model.)

 

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