Question

When preparing the selling and administrative expense​ budget, there is no need for a merchandising company to separate mixed costs into the fixed and variable components.A. True
B. False

Answer 1

Answer:

B) False

Explanation:

When you are preparing a budget for any of the company's departments, you have to separate fixed and variable costs.

For example, salespeople are usually paid a low fixed sum and a commission based on their total sales. Administrative expenses are not always fixed, most of them should be fixed, but some bonuses and other expenses might vary depending on the company's performance.