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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Definitions:

Gross Savings

The total amount of savings generated within an economy, including personal, business, and government savings, before accounting for depreciation.

Net Investment

The total spending on new capital minus the replacement of depreciated capital, indicating the actual increase in a company's or nation's capital stock.

GDP

GDP, or Gross Domestic Product, measures the total value of all goods and services produced within a country's borders over a specific time period, reflecting the size and health of its economy.

Imports

Goods and services bought by a country from foreign countries, which can range from raw materials to finished products.