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Budgeting for Fixed Selling and Administrative Expenses at The Fleece Enterprise

The Fleece Enterprise makes and sells a product titled Fleece. The company is in the process of preparing its selling and administrative expense budget for next year. The following budget data are available:

Variable Cost Per Fleece Sold Monthly Fixed Cost

Sales commissions......................$0.55

Distribution costs....................... $1.10

Advertising and promotion......... $1.20 $20,000

Office salaries..................................................................................$45,000

Depreciation on office equipment................. .......................................$5,000

Insurance on office building.................................................................$1,000

All of these expenses (except depreciation) are paid in cash in the month that they are incurred.

If the company has budgeted to sell 24,000 Fleeces in November, then the total budgeted fixed selling and administrative expenses for November are:

Solution Summary

The solution explains how to calculate the budgeted fixed selling and administrative expenses.

$2.19