Assume that a manufacturing company incurred the following costs: Direct labor $ 90,000 Advertising $ 40,000 Factory supervision $ 35,000 Sales commissions $ 15,000 Depreciation, office equipment $ 4,000 Indirect materials $ 5,000 Depreciation, factory building $ 20,000 Administrative office salaries $ 1,000 Utilities, factory $ 2,500 Direct materials $ 105,000 Insurance, factory $ 6,000 Property taxes, factory $ 7,000 What is the total amount of variable selling and administrative cost

The variable selling and administrative cost includes all selling and administrative costs that fluctuate based on the units sold. These costs include sales commissions, office supplies, utilities, and shipping expenses.

Data and Calculations:

Selling and Administrative Costs:

Fixed costs:

Advertising $ 40,000

Depreciation, office equipment $ 4,000

Administrative office salaries $ 1,000

Total fixed selling / admin. costs $45,000

Variable costs:

Sales commissions $ 15,000

Manufacturing Costs:

Variable manufacturing costs:

Direct materials $ 105,000

Direct labor $ 90,000

Total variable manufacturing costs $195,000

Factory overhead costs:

Insurance, factory $ 6,000

Property taxes, factory $ 7,000

Utilities, factory $ 2,500

Indirect materials $ 5,000

Depreciation, factory $ 20,000

Factory supervision $ 35,000 $75,500

Total factory costs $270,500

Thus, the total amount of the manufacturing company's variable selling and administrative cost is $15,000.

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