Cyberware uses flexible budgets that are based on the following data:

Cyberware uses flexible budgets that are based on the following data:










Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12% of sales
Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22% of sales
Miscellaneous selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,200 per month plus 15% of sales
Office salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,000 per month
Office supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4% of sales
Miscellaneous administrative expense . . . . . . . . . . . . . . . . . . . . . . . . $2,500 per month plus 2% of sales

Prepare a flexible selling and administrative expenses budget for March 2014 for sales volumes of $80,000, $100,000, and $120,000. (Use Exhibit 5 as a model.)


Answer:


















CYBERWARE
Flexible Selling and Administrative Expenses Budget
For the Month Ending March 31, 2014
Total sales $80,000 $100,000 $120,000
Variable cost:
Sales commissions (12% of sales) $ 9,600 $ 12,000 $ 14,400
Advertising expense (22% of sales) 17,600 22,000 26,400
Miscellaneous selling expense (15% of sales) 12,000 15,000 18,000
Office supplies expense (4% of sales) 3,200 4,000 4,800
Miscellaneous administrative expense (2% of sales) 1,600 2,000 2,400
Total variable cost $44,000 $ 55,000 $ 66,000
Fixed cost:
Miscellaneous selling expense $ 4,200 $ 4,200 $ 4,200
Office salaries expense 16,000 16,000 16,000
Miscellaneous administrative expense 2,500 2,500 2,500
Total fixed cost $22,700 $ 22,700 $ 22,700
Total selling and administrative expenses $66,700 $ 77,700 $ 88,700