Reference: 06-03
Gasson Company Is a Merchandising Firm Assume That All Activity Mentioned in This Problem Is Within

question 96

Multiple Choice

Reference: 06-03
Gasson Company is a merchandising firm. Next month the company expects to sell 800 units. The following data describe the company's revenue and cost structure: $$\begin{array} { | l | l | } \hline \text { Selling price per unit } & \$ 40 \\\hline \text { Sales commission } & 5 \% \\\hline \text { Purchase price (cost) per unit } & \$ 18 \\\hline \text { Advertising expense } & \$ 4,000 \text { per month } \\\hline \text { Administrative expense } & \$ 4,500 \text { per month plus } 15 \% \text { of sales } \\\hline\end{array}$$ Assume that all activity mentioned in this problem is within the relevant range.
-The expected net income next month is?

• A)$5,100.
• B)$11,200.
• C)$2,700.
• D)$7,500.

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Definitions:

Budget Surplus

Excess funding that occurs when government spends less than the amount of funds raised through taxes and fees.

Government of a Country

The organization that is the governing authority of a political unit, responsible for creating and enforcing laws, managing public resources and services, and protecting the rights of its citizens.

Fiscal Policy

Government policies regarding taxation and spending that influence economic conditions.

Lower Taxes

The reduction of tax rates or tax burdens to encourage economic activities or provide relief to taxpayers.