Swingers Company Makes and Sells Widgets Expenses Are Paid in the Month Incurred

question 156

Multiple Choice

Swingers Company makes and sells widgets.The company is in the process of preparing its Selling and Administrative Expense Budget for the month.The following budget data are available: $$\begin{array} { l c c } \begin{array} { l } \\\end{array} \\\text { Variable Cost } \\\underline{\text { Item} } &\underline{ \text { Per Unit Sold }} &\underline{\text { Monthly Fixed Cost }} \\\text { Sales commissions } & \$ 1 & \$ 5,000 \\\text { Shipping } & \$ 3 & \\\text { Advertising } & \$ 4 & \\\text { Executive salaries } & & \$ 60,000 \\\text { Depreciation on office equipment } & & \$ 2,000 \\\text { Other } & \$ 2 & \$ 3,000\end{array}$$ Expenses are paid in the month incurred.If the company has budgeted to sell 40,000 widgets in October, how much is the total budgeted selling and administrative expenses for October?

• A)$470,000
• B)$70,000
• C)$465,000
• D)$400,000

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, helping organizations manage their cash flow and ensure they have enough cash to cover their obligations.

Receipts And Disbursements

Refers to the process of recording incoming and outgoing monetary transactions within a particular period.

Investment In Current Assets

Funds used to acquire assets that are expected to be converted into cash, sold, or consumed within a year.