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:

Conglomerate Merger

A type of merger where two or more companies in unrelated business sectors combine.

Distinct Industries

Sectors of the economy that produce different types of goods or services, separated by clear boundaries in terms of product types and market applications.

Market Shares

The segment of a market dominated by a specific company or product.

Natural Monopolists

Firms that can provide a product or service at a lower cost than any competitor, often due to economies of scale, resulting in a single supplier in the market.