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Flexible budget for selling and administrative expenses for a service company Morningside Technologies Inc. uses flexible budgets that are based on the following data: Sales commissions 15% of sales Advertising expense 12% of sales Miscellaneous administrative expense $8,000 per month plus 10% of sales Office salaries expense $32,000 per month Customer support expenses $ 14,000 per month plus 18% of sales Research and development expense $35,000 per month Prepare a flexible selling and administrative expenses budget for April for sales volumes of $400,000, $500,000, and $600,000.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 22, Problem 22.2EX
Textbook Problem

Flexible budget for selling and administrative expenses for a service company

Morningside Technologies Inc. uses flexible budgets that are based on the following data:

Sales commissions 15% of sales
Advertising expense 12% of sales
Miscellaneous administrative expense $8,000 per month plus 10% of sales
Office salaries expense $32,000 per month
Customer support expenses $ 14,000 per month plus 18% of sales
Research and development expense

$35,000 per month

Prepare a flexible selling and administrative expenses budget for April for sales volumes of $400,000, $500,000, and $600,000.

Expert Solution
To determine

Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.

To Prepare: The flexible selling and administrative expenses budget for April for sales

volumes of $400,000, $500,000, and $600,000.

Explanation of Solution

The following table shows the flexible selling and administrative expenses budget for April.

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Chapter 22 Solutions

Accounting
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