Question

Techgear, Inc., manufactures specialty suits for triathletes. For the month of January, it projects the following selling and administrative expenses: sales commissions, 4% of sales; shipping expense, $4,500; advertising and marketing costs, $12,000, outstanding as a payable; electric and water utilities, $750; corporate office depreciation for computers, $8,800; bad debt expense, $8,000. Sales for the month of January equal $400,000. What is the total of expenses that will flow to the budgeted income statement?
A : $21,250
B : $33,250
C : $50,050
D : $41,250

Answer 1

Answer:

C : $50,050

Explanation:

Budgeted sales: $400,000

Budgeted Comission expense: $16,000

Budgeted shipping expenses: $4,500

Budgeted marketing costs: $12,000

Budgeted utility bills: $750

Budgeted depreciation expense: $8,800

Budgeted bad expense: $8,000

The sum of all those expenses is $50,050.

The totality of the expeneses listed in the question are part of the budgeted income statement, except for the budgeted revenue, because it is obviously not a expense.