B-21.08 Problem

B-21.08 Problem - Selling, General, and Administrative...

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B-21.08 Review the following SG&A budget that was prepared at the beginning of the current year. The economy appears to be slowing, and sales are now expected to run only 90% of plan. How much can now be expected to result for total SG&A? The only fixed cost that can be reduced relates to the advertising campaign. What are the possible impacts of attempting to save money by cutting a portion of the advertising budget?
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Unformatted text preview: Selling, General, and Administrative Budget For the Year Ending December 31, 20X5 Estimated units sold 50,000 X Per unit variable SG&A X $ 4.00 Total variable SG&A 200,000 $ Fixed SG&A Salaries 275,000 $ Office 60,000 Advertising 175,000 Other 25,000 Total fixed SG&A 535,000 $ Total budgeted SG&A 735,000 $...
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