Answer: $15,000
Explanation:
The Variable selling and Administrative costs from the question are;
Sales commissions only.
Variable selling and admin costs will therefore be;
= $15,000
The total amount of the manufacturing company's variable selling and administrative cost is $15,000.
The variable selling and administrative cost includes all selling and administrative costs that fluctuate based on the units sold. These costs include sales commissions, office supplies, utilities, and shipping expenses.
Data and Calculations:
Fixed costs:
Advertising $ 40,000
Depreciation, office equipment $ 4,000
Administrative office salaries $ 1,000
Total fixed selling / admin. costs $45,000
Variable costs:
Sales commissions $ 15,000
Variable manufacturing costs:
Direct materials $ 105,000
Direct labor $ 90,000
Total variable manufacturing costs $195,000
Factory overhead costs:
Insurance, factory $ 6,000
Property taxes, factory $ 7,000
Utilities, factory $ 2,500
Indirect materials $ 5,000
Depreciation, factory $ 20,000
Factory supervision $ 35,000 $75,500
Total factory costs $270,500
Thus, the total amount of the manufacturing company's variable selling and administrative cost is $15,000.
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