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Preparing a Selling and Administrative Expenses Budget

Developing the Operating Budget

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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
Quarter1234Year
Units to be Sold1,0001,2001,5002,0005,700
Variable S&A Expenses Per Unit x0.10x0.10x0.10x0.10x0.10
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

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