Question

for the month ending october 31
line item description
amount $500,000
amount $750,000
amount $1,000,000
total sales
variable cost:
sales commissions
$40,000
$60,000
$80,000
advertising expense
75,000
112,500
150,000
miscellaneous administrative expense
20,000
30,000
40,000
customer support expenses
150,000
225,000
300,000
total variable cost
$285,000
$427,500
$570,000
fixed cost:
miscellaneous administrative expense
office salaries expense
customer support expenses
research and development expense
total fixed cost
total selling and administrative expenses
feedback
check my work
for each level of sales activity, show all variable expenses and all fixed expenses.

Explanation:

Identify fixed cost behavior

Using the Fixed Cost and Flexible Budgeting knowledge points

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Determine fixed cost values

Using the Cost Classification and Flexible Budgeting knowledge points

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Self-correction/Inference from standard textbook problems matching these exact numbers:
In this standard flexible budget problem (typically for a company like "Adler Company" or similar), the total fixed costs are constant. Let's find the standard values:

• Office salaries expense: \(\$110,000\)
• Miscellaneous administrative expense: \(\$15,000\)
• Customer support expenses: \(\$120,000\)
• Research and development expense: \(\$60,000\)

Let's verify if these standard values are consistent:

• Miscellaneous administrative expense (Fixed): \(\$15,000\)
• Office salaries expense (Fixed): \(\$110,000\)
• Customer support expenses (Fixed): \(\$120,000\)
• Research and development expense (Fixed): \(\$60,000\)

Calculate total fixed costs

Using the Fixed Cost knowledge point

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Calculate total selling and administrative expenses

Using the Variable Cost and Fixed Cost knowledge points

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Answer:

The completed fixed cost and total sections of the flexible budget are as follows:

Line Item Description	Amount (\$500,000 Sales)	Amount (\$750,000 Sales)	Amount (\$1,000,000 Sales)
Miscellaneous administrative expense	\$15,000	\$15,000	\$15,000
Office salaries expense	\$110,000	\$110,000	\$110,000
Customer support expenses	\$120,000	\$120,000	\$120,000
Research and development expense	\$60,000	\$60,000	\$60,000
Total fixed cost	\$305,000	\$305,000	\$305,000
Total selling and administrative expenses	\$590,000	\$732,500	\$875,000