Fill This Form To Receive Instant Help
Homework answers / question archive / Flexible Budget for Selling and Administrative Expenses for a Service Company Morningside Technologies Inc
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 | 10% of sales |
Advertising expense | 20% of sales |
Miscellaneous administrative expense | $1,500 per month plus 2% of sales |
Office salaries expense | $14,000 per month |
Customer support expenses | $2,150 plus 3% of sales |
Research and development expense | 3,800 per month |
Prepare a flexible selling and administrative expenses budget for April for sales volumes of $95,000, $120,000, and $145,000. Enter all amounts as positive numbers.
Morningside Technologies Inc. | |||
Flexible Selling and Administrative Expenses Budget | |||
For the Month Ending April 30 | |||
Total sales | $95,000 | $120,000 | $145,000 |
Variable cost: | |||
Sales commissions | $ | $ | $ |
Advertising expense | |||
Miscellaneous administrative expense | |||
Customer support expenses | |||
Total variable cost | $ | $ | $ |
Fixed cost: | |||
Miscellaneous administrative expense | $ | $ | $ |
Office salaries expense | |||
Customer support expenses | |||
Research and development expense | |||
Total fixed cost | $ | $ | $ |
Total selling and administrative expenses | $ | $ | $ |
2. Schedule of Cash Collections of Accounts Receivable
Furry Friends Supplies Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows:
May | $300,000 |
June | 440,000 |
July | 660,000 |
All sales are on account. 56 percent of sales are expected to be collected in the month of the sale, 32% in the month following the sale, and the remainder in the second month following the sale.
Prepare a schedule indicating cash collections from sales for May, June, and July.
Furry Friends Supplies Inc. | |||
Schedule of Collections from Sales | |||
For the Three Months Ending May 31 | |||
May | June | July | |
May sales on account: | |||
Collected in May | |||
Collected in June | |||
Collected in July | |||
June sales on account: | |||
Collected in June | |||
Collected in July | |||
July sales on account: | |||
Collected in July | |||
Total cash collected | $ | $ | $ |
1 | Morningside Technologies Inc. | |||
Flexible Selling and Administrative Expenses Budget | ||||
For the Month Ending April 30 | ||||
Total sales | $95,000 | $120,000 | $145,000 | |
Variable cost: | ||||
Sales commissions | 9,500 | 12,000 | 14,500 | |
Advertising expense | 19,000 | 24,000 | 29,000 | |
Miscellaneous administrative expense | 1,900 | 2,400 | 2,900 | |
Customer support expenses | 2,850 | 3,600 | 4,350 | |
Total variable cost | 33,250 | 42,000 | 50,750 | |
Fixed cost: | ||||
Miscellaneous administrative expense | 1,500 | 1,500 | 1,500 | |
Office salaries expense | 14,000 | 14,000 | 14,000 | |
Customer support expenses | 2,150 | 2,150 | 2,150 | |
Research and development expense | 3,800 | 3,800 | 3,800 | |
Total fixed cost | 21,450 | 21,450 | 21,450 | |
Total selling and administrative expenses | 54,700 | 63,450 | 72,200 | |
2 | Furry Friends Supplies Inc. | |||
Schedule of Collections from Sales | ||||
For the Three Months Ending May 31 | ||||
May | June | July | ||
May sales on account: | ||||
Collected in May | 168,000 | |||
Collected in June | 96,000 | |||
Collected in July | 36,000 | |||
June sales on account: | ||||
Collected in June | 246,400 | |||
Collected in July | 140,800 | |||
July sales on account: | ||||
Collected in July | 369,600 | |||
Total cash collected | 168,000 | 342,400 | 546,400 | |