Selling and Administrative Budget 1 They will have the following monthly

Selling and administrative budget 1 they will have

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Selling and Administrative Budget 1. They will have the following monthly expenses: a. Salary Expense (Fixed) $14,000 b. Sales Commissions 5% of sales c. Supplies Expense 2% of sales d. Utilities (Fixed) $800 e. Rent (Fixed) $2,400 f. Miscellaneous (Fixed) $900 Equipment Cost $17,000 Salvage Value $2,000 Life 5 years Depreciation (per month) $250 January February March Salary Expense Sales Commissions Supplies Expense Utilities Rent Misc Depreciation Total Expense Cash Collections Sales Commissions and utilities are paid in the month after the month in which they are incurred All other expenses are paid in the month in which they are incurred. December Budgets Sales Commission $10,000 Utilities $800 January February March Salary Expense Sales Commissions Supplies Expense Utilities Rent Misc Total Cash Payments NOTE: Depreciation is a non-cash expense
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CASH BUDGET Using a line of credit, Mikey borrows and repays principle in increments of $1,000 on the last day of the month as needed Company policy is to maintain an ending cash balance of at least $50,000. The ending balance on the December cash budget is $50,000. 12/31 Debt outstanding $10,000 Interest 1% per month Cash Budget: January February March Beginning Cash Balance Cash Receipts Total Cash Available Cash Payments: Inventory Purchases Direct Labor Overhead S&A Interest Equipment Total Payments Financing Activities: Surplus (Shortage) Borrowing (repayment) Ending Balance Debt 31-Dec Borrowed Jan Jan 31 Balance Repaid Feb Feb 28 balance
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March
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