THE COSTS
SELLING AND ADMINISTRATIVE EXPENSES BUDGET

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        The sales budget  is often used as the starting point for estimating the selling and administrative expenses. For example, a budgeted increase in sales may require more advertising.
        Detailed supporting schedules are often prepared for major items in the selling and administrative expenses budget. For example, an advertising expense schedule for the marketing department should include the advertising media to be used (newspaper, direct mail, television) quantities (column inches, number of pieces, minutes) and the cost per unit. Attention to such details results in realistic budgets.
        The following table shows a selling and administrative expenses budget for the company Colt Manufacturing, Inc.:
              
    Colt Manufacturing, Inc.
      Selling and Administrative Expenses Budget
    For the Year Ending December 31, 2008
                                                                                                     .


    Selling expenses:


          Sales Salaries expense
    $715,000

          Advertising expense
    360,000

          Travel expense
    115,000

               Total selling expenses

    $1,190,000
    Administrative expenses:


          Officers' salaries expense
    $360,000

          Office salaries expense
    258,000

          Office rent expense
    34,500

          Office supplies expense
    17,500

          Miscellaneous administrative expenses
    25,000

               Total administrative expenses

    695,000
    Total selling and administrative expenses

    $1,885,000

        
                       
    Effective control results from assigning responsibility for achieving the budget to department supervisors.

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