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Advocard [28]
2 years ago
14

The selling and administrative expense budget of Choo Corporation is based on budgeted unit sales, which are 4,600 units for Aug

ust. The variable selling and administrative expense is $7.30 per unit. The budgeted fixed selling and administrative expense is $51,980 per month, which includes depreciation of $6,440 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the August selling and administrative expense budget should be:
a. $45,540
b. $85,560
c. $79,120
d. $33,580
Business
1 answer:
mr Goodwill [35]2 years ago
8 0

Answer:

Option (c) is correct.

Explanation:

Given that,

Budgeted unit sales for August = 4,600 units

Variable selling and administrative expense per unit = $7.30 per unit

Budgeted fixed selling and administrative expense = $51,980

Depreciation per month = $6,440

Total variable selling and administrative expense:

= Budgeted unit sales for August × variable selling and administrative expense per unit

= 4,600 × $7.30

= $33,580

Total fixed selling and administrative expense:

= Budgeted fixed selling and administrative expense - Depreciation per month

= $51,980 - $6,440

= $45,540

Total cash disbursements for selling and administrative expenses:

= Total variable selling and administrative expense + Total fixed selling and administrative expense

= $33,580 + $45,540

= $79,120

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If Local Co. had an increase in selling expenses of $300,000​, how would that affect each of its​ margins?  ​
wariber [46]

Answer:

D. Selling expenses do not affect the gross​ margin, but the increase in such expenses will decrease the other margins.

Explanation:

As Selling expenses are charged after gross Income or profit. So, it will not effect the gross income / profit. Other margin are calculated after adjusting the selling expenses, so that will be effected. Operating Margin and Net profit margin are both effected by change in the selling expenses.

Following is the Format of income statement

Sales

Less: Cost of Sales

Gross income / Profit

Less: Operating expenses

Admin Expenses

Selling Expenses

Other Expense

Operating Income / Profit

Less: Interest expense

Less: Tax

Net Income / Profit

6 0
2 years ago
Twist Corp. has a current accounts receivable balance of $457,615. Credit sales for the year just ended were $2,940,600.a. What
Alexus [3.1K]

Answer and Explanation:

The computations are as follows

a.  For company receivable turnover

As we know it is

= Credit Sales ÷ current account receivable balance

= $2,940,600 ÷ $457,615

= 6.43 times

b.

Now

company's days' sales in receivables is

= 365 ÷ Receivables turnover ratio

= 365  ÷ 6.43

= 56.77 days  

c.  Therefore the average collection period is the same as days sales in receivable i.e 56.77 days

4 0
2 years ago
Penny Company sells 25,000 units at $59 per unit. Variable costs are $29 per unit, and operating loss is $(50,000). Determine th
stiks02 [169]
D. 52% and $11 per unit
5 0
2 years ago
​Moe's Pizza Shop sells a large pizza for​ $12.00. Unit variable expenses total​ $8.00. The breakeven sales in units is​ 7,000 a
spayn [35]

Answer:

$12,000

Explanation:

Margin of safety = Current sales level - Break even point

=(8,000 ×12) - (7,000 × 12)

= 96,000 - 84,000

= $12,000

7 0
2 years ago
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received
marin [14]

Answer:

$11,560

$5666.661

Explanation:

Given the following :

Bill received from accountant = $17,000

This year's marginal tax rate = 32%

Next year's marginal tax rate = 37%

After tax return on investment = 11%

After tax cost of bill is paid in December :

Billed amount * this year's tax rate

$17,000 * ( 1 - 0.32)

= $17,000 * 0.68

= $11,560

B) After tax cost of bill was paid in January:

Billed amount * next year's tax rate * PV factor

From the present value factor table;

PV factor (1 years, 11%) = 0.9009

Hence,

$17,000 * 0.37 * 0.9009 = $5666.661

4 0
2 years ago
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