Question

All else constant, what would Chester’s SG&A/Sales ratio be if the company had spent an additional $1,500,000 for Crimp’s promotional budget and $750,000 for Crimp’s sales budget? Select: 1Save Answer 10.7% 9.2% 12.8% 12.2%

Answer 1

Answer: 11.7%

Explanation:

The current Selling, General and Administrative Expenses are the Promotions, Sales, Admin and R&D costs.

If the company spent an additional $1,500,000 for promotion and $500,000 for sales the total would be;

= 1,500 + 500 + 2,824 + 5,200 + 6,000 + 1,404

= $17,678,000

The SG&A/Sales ratio is;

= 17,678,000/ 151,411,000

= 0.116755

= 11.7%