Shep Company Combines Its Operating Expenses for Budget Purposes in a Selling

Essay

Shep Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first quarter of 2016 the following data are developed: 1. $\text {Sales: 20,000 units; unit selling price:}$$\quad$$\quad$$\$ 30$
2.
$\begin{array}{ll}\text {Variable costs per dollar of sales:}\\\text { Sales commissions } & 6 \% \\\text { Delivery expense } & 2 \% \\\text { Advertising } & 4 \%\end{array}$
3.
$\begin{array}{lr}\text { Fixed costs per quarter:}\\\text { Sales salaries } & \$ 24,000 \\\text { Office salaries } & 19,000 \\\text { Depreciation } & 6,000 \\\text { Insurance } & 2,000 \\\text { Utilities } & 1,000\end{array}$ Instructions
Prepare a selling and administrative expense budget for the first quarter of 2016.