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

Explanation:

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

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