Comparative Income Statements for Boggs Sporting Equipment Company for the Last

question 49

Multiple Choice

Comparative income statements for Boggs Sporting Equipment Company for the last two months are presented below:
$\begin{array}{|l|r|r|}\hline & \text { July } & \text { August } \\\hline \text { Sales in Units } & 11,000 & 10,000 \\\hline \text { Sales Revenue } & \$ 165,000 & \$ 150,000 \\\hline \text { Less: Cost of Goods Sold } & \underline{72,600} & \underline{66,000} \\\hline \text { Gross Margin } & 92,400 & 84,000 \\\hline \text { Less: Operating Expenses: } & & \\\hline \text { Rent } & 12,000 & 12,000 \\\hline \text { Sales Commissions } & 13,200 & 12,000 \\\hline \text { Maintenance Expenses } & 13,500 & 13,000 \\\hline \text { Clerical Expenses } & \underline{16,000} & \underline{15,000} \\\hline \text { Total Operating Expenses } & \underline{\$ 54,700} & \underline{\$ 52,000} \\\hline \text { Operating Income } & \underline{\$ 37,700} & \underline{\$ 32,000} \\\hline\end{array}$
All of the company's costs are either fixed, variable, or a mixture of the two (that is, mixed) . Assume that the relevant range includes all of the activity levels mentioned in this problem.


-What is the total monthly fixed cost for Boggs Sporting Equipment Company?

• A) $12,000.
• B) $22,500.
• C) $25,000.
• D) $40,000.

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