 minute rate in terms of pay. So be careful on that. Now we're going to take the direct labor budget and help us to create the factory overhead budget or we're going to create the factory overhead budget. Now when we think about factory overhead budget, the thing that we need to keep in mind is the fact that usually there's two components to factory overhead. We have some costs that are going to be variable and some that are fixed. We may have some mixed costs even, but we need to break out those two. We need to figure out how are we going to break these things out? How are we going to deal with the variable portion, the fixed portion? I mean the fixed portion is usually pretty easy because that's just going to be the same. We can take last year's numbers usually and just project them forward. They're not going to change. They're fixed kind of like the rent. Variable will change in some way. In this example, to reflect this in this example, we're going to take the direct labor hours which are being pulled down from the direct labor budget here. Direct labor hours, direct labor budget. We're going to multiply that times the variable factory overhead rate. So that's going to be in this case 2.6. So that's going to be the givens for this particular problem. Again in real life, we'd have to be, I mean in a book problem, we'd have to be given this type of information to calculate the variable portion in some way. In real life, we would have to figure out some kind of estimate to accurately figure out what the best estimate would be for the variable portion. This is what we're using here. That gives us the budgeted variable overhead. So the budgeted variable overhead, the 9793 times 2.6 gives us the 25461, the 10,000 times 2.6 gives us the 26,000 and so on. And then we come up with the fixed portion. Fixed portion is pretty straightforward. It's pretty easy. It's kind of like the rent. We just say, well, we know what the rent is. It's going to be the same going forward. It's always the same. So when we think about the fixed cost, we can think about what we traditionally often think about when we think about a budget and that's just, well, what was it last year? It's going to be the same next year. That's not the case for everything we've seen, but that is the case for many pieces and the fixed portion piece is usually in that type of area. So then the total then would be the variable portion plus the fixed portion. For example, the 25461 plus the 21 gives us the 46461, the 26,000 plus the 21,000 gives us the 47,000 and so on and so forth until we have the total in terms of the overhead for dollars of the 141.111. All right. Now we're going to look at the selling expense budget. We have the same kind of thing when they think about the selling. When we think about production of inventory, someone that, a company that produces inventory, we usually think about the selling and administrative are often the period costs. And they're often like overhead in that they have the fixed portion. The fixed portion is going to be easy because the fixed portion is fixed. When we think about the selling costs, we might think about salespeople's salary or the cost of the store that we sell in terms of rent or in terms of depreciation. Those things are usually fixed pretty straightforward. We may have the variable portion. However, for example, we could have the budgeted sales times the sales commission. So if we pay commission, that is something that's basically variable in nature and we'll have to figure out, well, okay, well, that's going to change. That's not going to be something that's going to be straightforward. We're going to need the sales number then if and if all sales are going to be commissioned sales, then we can take total sales and multiply times the commission. If only portion of the sales or commission sales, we're going to figure out what that portion will be multiplied times the commission. And if we did that, then we're going to take the sales 494 400 times 9% is the 44 496 and so on and so forth for July, August and September. Then we're going to have the fixed portion. So we have the fixed salaried individuals. There's this pretty straightforward. We know we're going to take the yearly salary and divide it by 12. And we'll get the yearly. So the fixed portion is easy. If we add those two up, we get the totals, for example, the 44 496 plus the 3500 gives us the 47996, the 42 336 plus the 3500 gives us the 45 836 and so on. Then we have the general administrative area. Again, usually fairly straightforward. We're talking about the office in this case and the office usually have salaried people working there, including the accountants who usually get paid salary. So that's going to be pretty much the same. It's a fixed cost going forward. The rent on the office or the depreciation on the office. Usually these are fixed things. Usually this is a pretty easier portion of the budget, because it doesn't vary in terms of changes with production. So in this case, we're just going to say that the salaries is salaries. So they're fixed in this case, 11,000 per month. We just take the total salary divided by 12. That's what people are going to get paid. We do have to watch out, of course, for increases and fluctuations in salaries, but pretty straightforward. Then we have the interest. We're going to include interest in this case. In this case, we have a loan out. And we are currently paying apparently 5000 of interest. This interest rates are usually pretty fixed as well. So as long as if the interest, I mean, if the loan amount doesn't vary, like if we're paying, we're not paying off principle, then the interest should be fairly constant on that as well for paying off principle. Then we just look at the amortization table and figure out what it's going to be month to month. And that's all we're going to have in terms of the general administrative. So that's what we're at at this point. And we will move on forward to cash and calculating cash and then the cash budget next time.