If we use ArtCraft Pottery as our example, which comes from the article on Budgeting - How to Develop the Operating Budget, the following information can be used to develop the selling and administrative expenses budget:
Information
In order to develop the Selling and Administrative Expenses budget, you first have to analyze the Sales Budget of ArtCraft Pottery. You will get your sales information there. Here is the other information that you will need for this budget: Variable expenses are $0.10 per unit sold. Salaries are about $1,420 per quarter. Advertising for quarters 1 through 4 respectively is: $100, $200, $800, $500 respectively.
Here is the Selling and Administrative Expenses Budget for ArtCraft Pottery.
ArtCraft Pottery
| Selling and Administrative Expenses Budget | |||||
| Quarter | 1 | 2 | 3 | 4 | Year |
| Units to be Sold | 1,000 | 1,200 | 1,500 | 2,000 | 5,700 |
| Variable S&A Expenses Per Unit | x0.10 | x0.10 | x0.10 | x0.10 | x0.10 |
| Total Variable Expenses | $100 | $120 | $150$$200 | $570 | |
| Fixed Selling and Administrative Expenses | |||||
| Salaries | $1,400 | $1,400 | $1,400 | $1,400 | $5,680 |
| Utilities | $50 | $50 | $50 | $50 | $200 |
| Advertising | $100 | $200 | $800 | $500 | $1,600 |
| Depreciation | $150 | $150 | $150 | $150 | $600 |
| Total Fixed Expenses | $1,720 | $1,820 | $2,420 | $2,120 | $8,080 |
| Total S&A Expenses | $1,820 | $1,940 | $2,570 | $2,320 | $8,650 |