Administrative cost budget homework help

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Apart from the production area, there are a lot more important segments in a company that requires huge financial attention. Although the product development is the main source of income but without these segments, it gets difficult to analyse the market. These segments includes sales, marketing, accounting, advertising and facilities departments. The budget including all of them can have a possibility to surpass the production budget and hence is considered under the category of administrative cost budget. In our Administrative cost budget homework help article we signify the importance of administrative budgets and its various traits.

Selling and administrative expense budget

 

Recorded quarterly or monthly or half yearly, administrative budgets are usually split into segments for sales & marketing budgets and administration budgets separately.General level of corporate activity in a specified period of time deduces the level of expenditures on administrative purposes. An activity based costing analysis method is opted to understand which activity requires exalted sales value and capital spending change. In our Administrative cost budget homework help article many bottlenecks in the sales department are also analysed. Rom a wage point of view all the wages of staff, bonuses, promotional cash etc. also is considered under the category of administrative cost.

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Format and Example

 

The following example explained by our Administrative cost budget homework help team experts give a clear insight about the arrangement of budget and it’s formatting.

Company XYZ
Selling and Administrative Expense Budget
For the Year Ending December 31, 2016
Quarter
1234Year
Budgeted Selling Expenses:
Sales Commission$3,720$2,880$2,790$3,990$13,380
Freight-out4,0003,5103,0506,05016,610
Budgeted Admin. Expenses:
Office Rent9,5009,5009,5009,50038,000
Office Salaries15,00015,00015,00015,00060,000
Office Supplies1,1201,0301,5602,8706,580
Miscellaneous Expenses9009009009003,600
Total Selling & Admin. Expense$34,240$32,820$32,800$38,310$1,38,170

 

 

Types of administrative expenses

 

In our Administrative cost budget homework help article we classify the administrative budget into the following three types
1. Company administration: this includes the expenses of stationary, infrastructure, inside official expenses etc. These expenses are done on a day to day basis and hence its record is kept in petty cash books.
2. General accounting: Expenses like wages and salaries of the staff and employees comes under general accounting. Apart from that the expenses to maintain the record of all the financial transactions in a particular year of accounting is also included in it.
3. General office: A chief cashier looks after all the expenses generated in the office. This may include the internet facilities, telephone bills, travel allowances for the employee etc.

The non-profit administrative expenses

 

A few functions carried out by the firm in order to promote themselves or publicize themselves cannot be counted under profitable expense. These expenses are opposed to earning a profit. A defined 80 percent for the non-profit purpose and 10 percent for fundraising expenses along with 10 percent of administration cost is a well plan for budgeting.
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