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

question 8

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 total administrative expense next month is?

• A)$14,900.
• B)$13,300.
• C)$9,300.
• D)$4,800.