The Following Budget Information Is Available for Crescent Company for January

question 67

Multiple Choice

The following budget information is available for Crescent Company for January Year 2: Sales
$ 800,000
Cost of goods sold
540,000
Utilities expense
2,500
Administrative salaries
100,000
Sales commissions
5% of sales
Advertising
20,000
Depreciation on store equipment
50,000
Rent on administration building
60,000
Miscellaneous administrative expenses
10,000
Percentage of sales on credit
80%
All operating expenses are paid in cash in the month incurred.The amount of expected cash outflow for selling and administrative expenses would be:

• A) $262,500.
• B) $247,50.
• C) $232,500.
• D) $312,500.

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Definitions:

Price Volatile

Characterizes a market or commodity whose price is subject to rapid, unexpected, and often large changes.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.

Supply Curve

A graph showing the relationship between the quantity of goods supplied by producers and the price of those goods.

Price Levels

The average of current prices across the entire spectrum of goods and services produced in the economy.