Zelia, Inc. has prepared the operating budget for the first quarter of the year. The company forecast sales of $40,000 in Januar
y, $50,000 in February, and $60,000 in March. Variable and fixed expenses are as follows: Variable Expenses: Power cost (40% of sales) Miscellaneous expenses: (15% of sales) Fixed Expenses: Salaries expense: $6000 per month Rent expense: $5000 per month Depreciation expense: $1400 per month Power cost/fixed portion: $600 per month Miscellaneous expenses/fixed portion: $1200 per month
Using the information above, calculate the amount of budgeted selling and administrative expenses for the month of February. Select one:
A. $36,200
B. $47,200
C. $27,500
D. $41,700
Using the information above, calculate the amount of budgeted selling and administrative expenses for the month of February. Select one:
A. $36,200
B. $47,200
C. $27,500
D. $41,700
1 answer:
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Answer:
Please see attachment and assumptions
Explanation:
<h2>Please note that the assumption is that the full question is as follows .</h2><h2>You are making the inventory decisions for an international company that sells bathing suits. The product has a forecasted daily demand with mean 100 and standard deviation 36. The selling season only lasts 6 months since bathing suits are a seasonal item. You are procuring the product from your factory in China (out-sourcing) and as a result the lead time is so long (6 months) that you can only place only one order per selling season (6 months before the season begins). You want to ensure a service level of 97.5% and the cost of capital of the firm is 20% (that is, the firm faces an annual interest rate of 20%). Shipping cost is $4,500 while procurement cost (purchase cost) per item is $5.</h2><h2>1.How many bathing suits should you order from your factory in China? </h2><h2>2.What is the total holding cost? </h2><h2>3.What is the total ordering cost?</h2>