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5 Dec 2023
The meaning of Development Administration
The meaning of Development Administration
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Flexible Budget for Selling and Administrative Expenses for a Service company
Morningside Technologies Inc. uses flexible budgets that are based on the following data:
Sales commissions | 15% of sales |
Advertising expense | 12% of sales |
Miscellaneous administrative expense | $8,000 per month plus 10% of sales |
Office salaries expense | $32,000 per month |
Customer support expenses | $14,000 per month plus 18% of sales |
Research and development expense | $35,000 per month |
Prepare a flexible selling and administrative expenses budget for April for sales volumes of $400,000, $500,000, and $600,000.
MORNINGSIDE TECHNOLOGIES INC. | |||
Flexible Selling and Administrative Expenses Budget | |||
For the Month Ending April 30 | |||
Total sales | $400,000 | $500,000 | $600,000 |
Variable cost: | |||
Sales commissions | $ | $ | $ |
Advertising expense | |||
Miscellaneous administrative expense | |||
Customer support expense | |||
Total variable cost | $ | $ | $ |
Fixed cost: | |||
Miscellaneous administrative expense | $ | $ | $ |
Office salaries expense | |||
Customer support expense | |||
Research and development expense | |||
Total fixed cost | $ | $ | $ |
Total selling and administrative expenses | $ | $ | $ |
Allocate the support department cost to operating departmentusing Direct Method. The information for the recent period is asfollows:
Support Department | Operating Department | ||||
Administration | Housekeeping | Medical | Dental | Total | |
Cost | 32400 | 48600 | 127,000 | 106,000 | 314,000 |
Possible Allocation Bases:
Support Department | Operating Department | ||||
Administration | Housekeeping | Medical | Dental | Total | |
No. of Employees | 2 | 2 | 5 | 3 | 12 |
Square Feet | 900 | 100 | 8000 | 1000 | 10,000 |
Administration Cost will be allocated using number of employeesand Housekeeping cost will be allocated using square feet.