Reference: 06-02
Comparative Income Statements for Boggs Sports Equipment Company

question 98

Multiple Choice

Reference: 06-02
Comparative income statements for Boggs Sports Equipment Company for the last two months are presented below: $\begin{array}{|l|l|l|}\hline & \text { July } & \text { August } \\\hline \text { Sales in Units } & 11,000 & 10,000 \\\hline & & \\\hline \text { Sales Revenue } & \$ 165,000 & \$ 150,000 \\\hline \text { Less Cost of Goods Sold } & 72,600 & 66,000 \\\hline \text { Gross Margin } & 92,400 & 84,000 \\\hline \text { Less Operating Expenses: } & & \\\hline \text { Rent } & 12,000 & 12,000 \\\hline \text { Sales Commissions } & 13,200 & 12,000 \\\hline \text { Maintenance Expenses } & 13,500 & 13,000 \\\hline \text { Clerical Expense } & 16,000 & 15,000 \\\hline \text { Total Operating Expenses } & 54,700 & 52,000 \\\hline \text { Net income } & \underline{\$ 37,700} & \$ 32,000 \\\hline\end{array}$ All of the company's costs are either fixed, variable, or a mixture of the two (i.e., mixed) . The company is a merchandising company. Assume that the relevant range includes all of the activity levels mentioned in this problem.
-If sales are projected to be 8,000 units in September, total expected operating expenses would be?

• A)$46,600.
• B)$44,750.
• C)$41,600.
• D)$49,300.

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Definitions:

Organ Systems

Groups of organs that work together to perform complex functions for the body.

Clinical Age

Age of the developing fetus from the time of the mother’s last menstrual period before pregnancy.

Conception

The process of fertilization where a sperm cell unites with an ovum, forming a zygote, marking the beginning of pregnancy.

Menstrual Period

The monthly cycle of changes in the ovaries and the lining of the uterus, leading to the shedding of the uterine lining and bleeding, known as menstruation.