# Walnut has forecast sales for

Walnut has forecast sales for the next three months as follows:July 4,700 units, August 6,900 units, September 8,000 units.Walnut’s policy is to have an ending inventory of 50% of the nextmonth’s sales needs on hand. July 1 inventory is projected to be2,100 units. Selling and administrative costs are budgeted to be\$16,000 per month plus \$14 per unit sold. What are budgeted sellingand administrative expenses for July?

• \$143,500

• \$77,300

• \$84,700

• \$81,800

Calculation of budgeted selling andadministrative expenses for July

Budgeted selling andadministrative expenses = \$ 16,000 + (Number of units budgeted tobe sold X \$ 14 per unit)

=\$ 16,000 + (4,700 units X \$ 14 per unit)

= \$ 16,000 + \$ 65,800

=\$ 81,800

Therefore Budgeted selling and administrative expensesfor July is \$ 81,800.

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