Wala Inc. bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $3.90 per unit. The budgeted fixed selling and administrative expense is $30,340 per month, which includes depreciation of $3,610. The remainder of the fixed selling and administrative expense represents current cash flows. The sales budget shows 2,900 units are planned to be sold in July. Required: Prepare the selling and administr

The preparation of the selling and administrative expenses budget for the month of July is presented below:

Selling and administrative expenses Budget

For the month of July

Budgeted Sales unit 2,900 units (A)

Variable selling and administrative expenses per unit $3.90 (B)

Budgeted variable expenses $11,310 (C) = A * B

Budgeted fixed selling and administrative expense $30,340

Total budgeted selling and administrative expenses $41,650

Less: depreciation - $3,610

Cash disbursement for selling and administrative expenses $38,040