Reference: 06-13
a Comparative Income Statement for Jimbob Co -What Is the Best Estimate of the Company's Total Fixed

question 73

Multiple Choice

Reference: 06-13
A comparative income statement for Jimbob Co., a merchandising company, for the three months ended June is presented below.
Jimbob Co.
Comparative Income Statement
For the Second Quarter $$\begin{array} { | l | l | l | l | } \hline & \text { April } & \text { May } & \text { June } \\\hline \text { Sales in units } & 4,500 & 5,250 & 6,000 \\\hline \text { Sales revenue } & \$ 630,000 & \$ 735,000 & \$ 840,000 \\\hline \text { Less cost of goods sold } & 252,000 & 294,000 & 336,000 \\\hline \text { Gross Margin } & 378,000 & 441,000 & 504,000 \\\hline \text { Less operating expenses: } & & & \\\hline \text { Shipping expense } & 56,000 & 63,500 & 71,000 \\\hline \text { Advertising expense } & 70,000 & 70,000 & 70,000 \\\hline \text { Salaries and commissions } & 143,000 & 161,750 & 180,500 \\\hline \text { Insurance expense } & 9,000 & 9,000 & 9,000 \\\hline \text { Depreciation expense } & 42,000 & 42,000 & 42,000 \\\hline \text { Total operating expenses } & 320,000 & 346,250 & 372,500 \\\hline \text { Net income } & \$ 58,000 & \$ 94,750 & \$ 131,500 \\\hline\end{array}$$
-What is the best estimate of the company's total fixed operating expenses per month

• A)$121,000.
• B)$162,500.
• C)$42,000.
• D)$177,000.

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