Cost Accounting Quiz
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BUDGETING AND PLANNING
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Pinnacle Corporation is preparing its selling and administrative budget for the first quarter and needs to consider the timing differences between expense recognition and cash payments. Monthly fixed costs total $35,000, with $8,000 representing depreciation. Variable costs are $1.80 per unit sold. The company pays 60% of its variable costs in the month incurred and 40% in the following month. January sales are budgeted at 22,000 units, February at 26,000 units, and March at 24,000 units. Additionally, $4,800 in variable costs from December are still unpaid. What is the total cash outflow for selling and administrative expenses in February?
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