Question

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? Estimated units sold: 50,000 X per unit variable SG&A: $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

          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? Estimated units sold: 50,000 X per unit variable SG&A: $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

Added by Anthony P.

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