Dart IncMakes and Sells Umbrellas Expenses Are Paid in the Month Incurred

question 21

Multiple Choice

Dart Inc.makes and sells umbrellas.The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year.The following budget data are available: $\begin{array}{lcr} &\underline{ \text { Variable Cost Per Unit Sold }} &\underline{ \text { Monthly Fixed Cost }} \\\text { Sales commissions } & \$ 0.60 & \$ 6,000 \\\text { Shipping } & 1.20 & \\\text { Advertising } & 0.30 & \\\text { Executive salaries } & & 40,000 \\\text { Depreciation on office equipment } & & 8,000\\\text { Other }& 0.35 & 28,000\end{array}$
Expenses are paid in the month incurred.If the company has budgeted to sell 8000 umbrellas in October how much is the total budgeted variable selling and administrative expenses for October?

• A)$16800
• B)$18400
• C)$101600
• D)$19600

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Definitions:

Total Liabilities

The sum of all financial obligations a company has to external parties, including both short-term and long-term debts.

Accounting Equation

The fundamental formula in accounting that states assets equal liabilities plus equity (Assets = Liabilities + Equity).

Owner's Equity

The net worth of an owner in a company, calculated as the difference between the company's assets and liabilities.

Liabilities

Financial obligations or debts of a business that are due to be paid to creditors in the future.