Hi-Value Products Company Is Creating an Operating Budget for the 3^rd

question 88

Essay

Hi-value Products Company is creating an operating budget for the 3^rd quarter, and is now preparing the operating expense budget. Assumptions for operating expenses are as follows:
Miscellaneous expense - variable portion: 10% of sales revenue
Miscellaneous expense - fixed portion: $4,200 per month
Salary expense - fixed: $12,000 per month
Rent expense - fixed: $8,000 per month
Depreciation expense - fixed: $5,600 per month
Sales for July, August and September were budgeted at $100.000, $120,000, and $160,000.
Using the format below, please prepare an operating expense budget.
$$\begin{array} { | l | l | l | l | } \hline \text { Operating Expenses Budget } & \text { Jul } & \text { Aug } & \text { Sep } \\\hline \text { Variable operating expenses: } & & & \\\hline \text { Misc. expense(10\% of sales) } & & & \\\hline \text { Total variable expenses } & & & \\\hline \text { Fixed operating expenses: } & & & \\\hline \text { Salary expense } & & & \\\hline \text { Rent expense } & & & \\\hline \text { Depreciation expense } & & & \\\hline \text { Misc. expense(fixed portion) } & & & \\\hline \text { Total fixed expenses } & & & \\\hline \text { Total operating expenses } & & & \\\hline\end{array}$$

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Definitions:

Functional Groups

Teams or departments in an organization each specialized in a specific area of function, such as marketing, finance, or human resources.

Marketing Departments

Specialized divisions within a company focused on developing strategies to promote, sell, and distribute a company's products or services.

Synergy

Describes a situation where the combined effect of a group is greater than the sum of individual efforts.

Complementary Skills

Skills that different individuals bring to a team or partnership that, when combined, enhance the group's overall ability to achieve its objectives.