4 Rickshaw Trading is in the process of projecting its operating expenses for the months of June to August, the firms' peak season/ Provided below is a breakdown of Rickshaw's operating expenses for the previous month, May Expenses Amount Sales Commissions Utilities Repairs and Maintenance Taxes and Licenses Advertising and Promotion Delivery and Transportation Rent 48,000.00 2,500.00 8,000.00 3,500.00 15,000.00 10,000.00 14,000.00 Rickshaw Trading pays a 10% sales commission based on that month's actual sales. For the next three months, Sales is projected at P500,000.00; P620,000.00; and P70,000.00 respectively. Since Rickshaw 's usage of electricity water and telephone is relatively stable, it anticipates that utilities expense will not change over the three months. Rickshaw is currently sending some of the entity's vehicles for monthly maintenance. Maintenance cost for each month is expected to be at P12,000.00 Taxes and Licenses expense is expected to remain constant over the coming three months last May, Rickshaw paid for an advertisement in a school fair that cost him P15,000.00 For the next three months, Rickshaw allots P4,000.00 for advertising for each month. On the other hand, delivery and transportation costs are expected to increase by 10% each month. Rickshaw pays a P5,000.00 monthly rent in one of its warehouses where his goods are being stored. Prepare Rickshaw's budget for operating expenses for each of the three months covered and in total as well.
4 Rickshaw Trading is in the process of projecting its operating expenses for the months of June to August, the firms' peak season/ Provided below is a breakdown of Rickshaw's operating expenses for the previous month, May Expenses Amount Sales Commissions Utilities Repairs and Maintenance Taxes and Licenses Advertising and Promotion Delivery and Transportation Rent 48,000.00 2,500.00 8,000.00 3,500.00 15,000.00 10,000.00 14,000.00 Rickshaw Trading pays a 10% sales commission based on that month's actual sales. For the next three months, Sales is projected at P500,000.00; P620,000.00; and P70,000.00 respectively. Since Rickshaw 's usage of electricity water and telephone is relatively stable, it anticipates that utilities expense will not change over the three months. Rickshaw is currently sending some of the entity's vehicles for monthly maintenance. Maintenance cost for each month is expected to be at P12,000.00 Taxes and Licenses expense is expected to remain constant over the coming three months last May, Rickshaw paid for an advertisement in a school fair that cost him P15,000.00 For the next three months, Rickshaw allots P4,000.00 for advertising for each month. On the other hand, delivery and transportation costs are expected to increase by 10% each month. Rickshaw pays a P5,000.00 monthly rent in one of its warehouses where his goods are being stored. Prepare Rickshaw's budget for operating expenses for each of the three months covered and in total as well.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 48E
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Transcribed Image Text:4 Rickshaw Trading is in the process of projecting its operating expenses for the months of June to August, the
firms' peak season/ Provided below is a breakdown of Rickshaw's operating expenses for the previous month, May
Expenses
Amount
Sales Commissions
Utilities
Repairs and Maintenance
Taxes and Licenses
Advertising and Promotion
Delivery and Transportation
Rent
48,000.00
2,500.00
8,000.00
3,500.00
15,000.00
10,000.00
14,000.00
Rickshaw Trading pays a 10% sales commission based on that month's actual sales. For the next three months,
Sales is projected at P500,000.00; P620,000.00; and P70,000.00 respectively. Since Rickshaw 's usage of electricity
water and telephone is relatively stable, it anticipates that utilities expense will not change over the three months.
Rickshaw is currently sending some of the entity's vehicles for monthly maintenance. Maintenance cost for each month
is expected to be at P12,000.00 Taxes and Licenses expense is expected to remain constant over the coming three months
last May, Rickshaw paid for an advertisement in a school fair that cost him P15,000.00 For the next three months,
Rickshaw allots P4,000.00 for advertising for each month. On the other hand, delivery and transportation costs are
expected to increase by 10% each month. Rickshaw pays a P5,000.00 monthly rent in one of its warehouses
where his goods are being stored.
Prepare Rickshaw's budget for operating expenses for each of the three months covered and in total as well.
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