7. Selling and Administrative

Question 1

Types of Budgets (9)

Answer 1

1. Sales
2. Production
3. Desired ending inventory
4. Cogs
5. Selling
6. Administrative
7. Cash
8. Capital
9. Budgeted Income

Question 2

Types of of Selling and Admin expense (6)

Answer 2

1. Discretionary
2. Non discretionary
3. Selling- Direct cost
4. General - Indirect cost
5. Administrative costs
6. Headcount

Question 3

Discretionary

Answer 3

• mostly variable
• not essential to the business
• ex. companies who give employees extra for meals and entertainment

Question 4

Nondiscretionary

Answer 4

• mostly fixed

- ex. rent, head count

Question 5

General - Indirect

Answer 5

mostly fixed and some variable

Question 6

Selling - direct

Answer 6

• expenses that can be directly linked to the sale of a unit
• mostly variable and some fixed
• ex. warranty, credit, advertising

Question 7

Administrative

Answer 7

any expense still induced regardless of sales

ex. salaries, rent, heat

Question 8

Head count

Answer 8

• actual salary + expected change
• benefits + expected change
• training