Answer:
Budgeted selling and administrative expenses must be $190,000.
Explanation:
Budgeted selling and administrative expenses can be calculated as follows:
Budgeted gross margin = Budgeted sales * Percentage of budgeted sales that is budgeted gross margin = $1,150,000 * 30% = $345,000
Budgeted net income = Budgeted gross margin - Budgeted selling and administrative expenses …………. (1)
Substituting the relevant values into equation (1) and solve for budgeted selling and administrative expenses, we have:
$155,000 = $345,000 - Budgeted selling and administrative expenses
Budgeted selling and administrative expenses = $345,000 - $155,000 = $190,000
Therefore, budgeted selling and administrative expenses must be $190,000.
