Original Message:
Sent: 05-27-2023 02:16 AM
From: Nuthan Acha
Subject: PART 1 SUM
to calculate the total sales and administrative expense budget, we need to consider the various expenses involved.
Sales Expenses: Sales staff commission: $20 per unit * 5,000 units = $100,000 Shipping cost: $15 per unit * 5,000 units = $75,000 Promotional catalog cost: $5 per unit * 5,000 units = $25,000
Administrative Expenses: Cost of goods sold: $30 per unit * 5,000 units = $150,000 Fixed manufacturing overhead: $45,000 Executive salaries: $40,000 Base salaries for sales staff: $22,000 Advertising: $15,000 Office rent: $10,000 Office equipment depreciation: $8,000 Other administrative expense: $3,000
Now let's calculate the total sales and administrative expense budget:
Total sales expenses = Sales staff commission + Shipping cost + Promotional catalog cost = $100,000 + $75,000 + $25,000 = $200,000
Total administrative expenses = Cost of goods sold + Fixed manufacturing overhead + Executive salaries + Base salaries for sales staff + Advertising + Office rent + Office equipment depreciation + Other administrative expense = $150,000 + $45,000 + $40,000 + $22,000 + $15,000 + $10,000 + $8,000 + $3,000 = $293,000
Therefore, the total sales and administrative expense budget would be $200,000 + $293,000 = $493,000.
So, the correct option is:
d. $493,000.
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Nuthan Acha
Student
Korutla
India
Original Message:
Sent: 05-26-2023 09:22 AM
From: Manasi Paralkar
Subject: PART 1 SUM
Hi all, can someone help me with the following question? I think the answer should be 298,000 but my study partner suggests that it should be option D.
A company sells a single product and its sales staff earns a commission of $20 per unit. It costs $15 to ship each unit, and a $5 promotional catalog is sent with each item. The cost of goods sold is budgeted at $30 per unit. The company's fixed manufacturing overhead is budgeted at $45,000 per month. The budget for executive salaries is $40,000 per month, and the base salaries for the sales staff is $22,000. Other monthly expenses include advertising of $15,000, office rent of $10,000,
office equipment depreciation of $8,000, and $3,000 of other administrative expense. If the company budgets its November sales at 5,000 units, what would be the total sales and administrative expense budget?
a. $298,000.
b. $343,000.
c. $448,000.
d. $493,000.
Thank you in advance.
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Manasi Paralkar
None
Virar West MH
India
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