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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
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.

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

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

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