D1936 unit 15

Terdoo

Can someone help with a question on the cash flow statement of D1936 unit 15 please, I am stuck with the Sales administration cost , where do they get 20200 from? my brain is gone, i cannot get it.

Thanks in advance

sdv

Information available

1 Sales will be 60,000 units in July, 80,000 in August and 100,000 in September.

2 The unit selling price will be £6 for July and August but will increase to £6.30 in
September.

3 The sales department costs comprise certain variable costs (2% of turnover) and fixed
costs of £14,000 per month. The budgeted depreciation included in fixed costs is
£1,000 per month.



Costs for July = (60,000 x £6) x 2% = £7,200 Plus Fixed Costs £14,000 less depreciation £1,000 = £20,200

Cost for Aug = (80,000 x £6.00) x2% = £9,600 + (14000-1000) = £22,600

Cost For Sep = (100,000 x £6.30) x 2% = 12,600 + (14000-1000) = £25,600