Asked by Kaohulani Palakiko on May 09, 2024
Verified
The estimated selling and administrative expense for May is closest to:
A) $115,700
B) $80,000
C) $77,130
D) $35,700
Selling And Administrative Expense
Costs incurred that are not directly tied to the production of goods or services, including sales personnel salaries and office expenses.
- Comprehend the calculation of selling and administrative expenditures as part of budgeting.
Verified Answer
CH
Christopher HawkinsMay 09, 2024
Final Answer :
A
Explanation :
The estimated selling and administrative expense for May is computed as follows: Reference: CH08-Ref6
Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:
40% in the month of the sale
60% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 20% of the following month's sales.The ending raw materials inventory should equal 30% of the following month's raw materials production needs.
Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:
40% in the month of the sale
60% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 20% of the following month's sales.The ending raw materials inventory should equal 30% of the following month's raw materials production needs.
Learning Objectives
- Comprehend the calculation of selling and administrative expenditures as part of budgeting.
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