Problem:
The Fleece Enterprise makes and sells a product titled Fleece. The company is in the process of preparing its selling and administrative expense budget for next year. The following budget data are available:
Variable Cost Per Fleece Sold Monthly Fixed Cost
Sales commissions......................$0.55
Distribution costs....................... $1.10
Advertising and promotion......... $1.20 $20,000
Office salaries..................................................................................$45,000
Depreciation on office equipment................. .......................................$5,000
Insurance on office building.................................................................$1,000
All of these expenses (except depreciation) are paid in cash in the month that they are incurred.
If the company has budgeted to sell 24,000 Fleeces in November, then the total budgeted fixed selling and administrative expenses for November are: