Wilson Company Prepared the Following Preliminary Budget Assuming No Advertising

question 46

Multiple Choice

Wilson Company prepared the following preliminary budget assuming no advertising expenditures:
$\begin{array}{|l|r|}\hline \text { Selling price } & \$ 10 \text { per unit } \\\hline \text { Unit sales } & 100,000 \\\hline \text { Variable expenses } & \$ 600,000 \\\hline \text { Fixed expenses } & \$ 300,000 \\\hline\end{array}$
Based on a market study,the company estimated that it could increase the unit selling price by 15% and increase the unit sales volume by 10%,if $100,000 were spent on advertising.Assuming that these changes are incorporated in its budget,what should be the budgeted operating income?

• A) $175,000.
• B) $190,000.
• C) $205,000.
• D) $365,000.

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Definitions:

Behaviorally Anchored Rating Scale

A performance appraisal method that uses specific examples of behavior to evaluate employees' performance.

Reliability

Is the consistency of a particular selection device—that is, it measures whatever it is supposed to measure without random error; this is not the same as accuracy.

Behavioral Examples

Specific instances of an individual's actions or reactions used to illustrate patterns of behavior.

Performance Appraisal

A systematic evaluation of an employee's performance at work, typically conducted by their supervisor to provide feedback and guide future development.