Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales 34,000 36,000 27,000 32,000 The company’s variable selling and administrative expense per unit is $3.30. Fixed selling and administrative expenses include advertising expenses of $11,000 per quarter, executive salaries of $53,000 per quarter, and depreciation of $33,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $7,200 will be paid in the second quarter. Required: Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Per Unit" answers to 2 decimal places.)

Answer and Explanation:

The preparation of company’s selling and administrative expense budget for the upcoming fiscal year is shown below:-

                                     Weller Company

              Selling and Administrative Expense Budget

Particulars     1st Quarter  2nd Quarter  3rd Quarter  4th Quarter   Year

Budgeted Unit

Sales a         34,000         36,000          27,000       32,000     129,000

Variable Selling and Administrative Expense

Per Unit           $3.3               $3.3                $3.3           $3.3           $3.3

Variable Selling and Administrative

Expense (a × b) $112,200  $118,800       $89,100     $105,600     $425,700

Fixed Selling and Administrative Expense

Advertising    $11,000       $11,000        $11,000         $11,000        $44,000

Executive

Salaries            $53,000   $53,000    $53,000      $53,000    $212,000

Insurance         $4,000       0                 $4,000           0            $8,000

Property Taxes 0               $7,200          0                   0             $7,200

Depreciation   $33,000     $33,000   $33,000     $33,000     $132,000

Total Fixed Selling and Administrative

Expense          $101,000   $104,200   $101,000   $97,000      $403,200

Total Selling and Administrative

Expense         $213,200     $223,000   $190,100  $202,600   $828,900

Less:

Depreciation  $33,000      $33,000    $33,000    $33,000    $132,000

Cash Paid for Selling and

Administrative

Expenses     $180,200      $190,000   $157,100  $169,600     $696,900

Total direct labor hours= 102,144

Total direct labor costs= $2,042,880

Explanation:

Giving the following formula:

Standard quantity= 2.4 hours

Standard rate= $20 per hour

First, we need to calculate the production required:

Production= sales + desired ending inventory - beginning inventory

Production= 43,000 + 110 - 550

Production= 42,560 units

Now, the direct labor budget:

Total direct labor hours= 42,560*2.4= 102,144

Total direct labor costs= 102,144*20= $2,042,880