The following budget information is available for the Arch Company for January Year 2: Sales $ 860,000 Cost of goods sold 540,000 Utilities expense 2,800 Administrative salaries 100,000 Sales commissions 5 % of sales Advertising 20,000 Depreciation on store equipment 50,000 Rent on administration building 60,000 Miscellaneous administrative expenses 10,000 All operating expenses are paid in cash in the month incurred. Compute the total budgeted selling and administrative expenses (excluding interest) amount for January Year 2.

Answer and Explanation:

The computation of the total budgeted selling and administrative expenses is shown below;

Utilities expense $2,800

Administrative salaries $100,000

Sales commissions 5 % of sales i.e. 5% of $860,000  $43,000

Advertising $20,000

Depreciation on store equipment $50,000

Rent on administration building $60,000

Miscellaneous administrative expenses $10,000

total budgeted selling and administrative expenses $285,800

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