E 11.6 - Haerve Company - selling and administrative expense

Exercise

E 11.6

The budgeted unit sales of Haerve Company for the upcoming fiscal year are provided below:

                                                                1^st Quarter          2^nd Quarter         3^rd Quarter          4^th Quarter

Budgeted unit sales        12,000                   14,000                   11,000                   10,000

The company’s variable selling and administrative expenses per unit are £2.75. Fixed selling and administrative expenses include advertising expenses of £12,000 per quarter, executive salaries of £40,000 per quarter, and depreciation of £16,000. In addition, the company will make insurance payment of £6,000 in the 2^nd quarter and £6,000 and the 4^th quarter.  Finally, property taxes of £6,000 will be paid in the 3^rd quarter.

Required:

Prepare the company’s selling and administrative expense budget for the upcoming fiscal year.