Preparing a Selling and Administrative Expenses Budget Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of $19,730,000. There is a 3% commission on sales. In addition, fixed expenses of the sales and administrative offices include the following: Salaries $ 960,000 Utilities 365,000 Office space 230,000 Advertising 1,200,000 Required: Prepare a selling and administrative expenses budget for Fazel Company for the coming year. Fazel Company Selling and Administrative Expenses Budget For the Coming Year Variable selling expenses $ Fixed expenses: Salaries $ Utilities Office space Advertising Total fixed expenses Total selling and administrative expenses $

Solution and Explanation:

The following is the selling and administrative expense structure of the Fazel company for the year. According to the given information and the data:

The Variable selling expenses (19730000* 3%)                 591900

The Fixed Expenses  

The Salaries expense              960000  

The Utilities expense              365000  

The Office space expense         230000  

The Advertising expense         1200000  

The Total Fixed expense                                                  2755000

The Total selling & admin Expense                                  3346900

Note: the variable expense is calculated by multiplying the total sales given in the question with the percentage of the commission given

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