Walnut has forecast sales for the next three months as follows:

July 5,200 units, August 7,200 units, September 8,700 units.

Walnut's policy is to have an ending inventory of 40% of the next month's sales needs on hand. July 1 inventory is projected to be 2,700 units. Selling and administrative costs are budgeted to be $27,000 per month plus $5 per unit sold.

What are budgeted selling and administrative expenses for September?

Question

Chris Nielsen

Business

25 July, 20:20

Walnut has forecast sales for the next three months as follows:

July 5,200 units, August 7,200 units, September 8,700 units.

Walnut's policy is to have an ending inventory of 40% of the next month's sales needs on hand. July 1 inventory is projected to be 2,700 units. Selling and administrative costs are budgeted to be $27,000 per month plus $5 per unit sold.

What are budgeted selling and administrative expenses for September?

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Answers (1)

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Samantha · Answer 1

Total selling and administrative cost = $70,500

Explanation:

Giving the following information:

September 8,700 units.

Selling and administrative costs are budgeted to be $27,000 per month plus $5 per unit sold.

We can formulate the equation of selling and administrative costs:

Total cost = fixed costs + total variable costs

Total selling and administrative cost = 27,000 + 5*x

Total selling and administrative cost = 27,000 + 5*8,700 = $70,500