Warshaw Company Budgets Payroll at $3000 Per Month Plus a Percentage

question 39

Multiple Choice

Warshaw Company budgets payroll at $3000 per month plus a percentage of monthly sales. The June operating expenses budget includes total payroll of $12,600 with budgeted sales of $160,000. Sales for July are budgeted at $100,000 while purchases of inventory for July are budgeted at $1,000,000. Depreciation and insurance for July are estimated at $600 and $900, respectively. Office and administrative expenses related to purchasing inventory are budgeted at 10% of purchases for the month. The purchase of $2800 in equipment and $1100 in furniture is expected in July. If the percentage of monthly sales used in budgeting payroll increases 15%, what would the total payroll budgeted for July be?

• A)$6000
• B)$9900
• C)$6900
• D)$9000

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Definitions:

Total Utility

This is the aggregate level of satisfaction or value that consumers derive from consuming a given amount of goods or services.

Marginal Utility

The additional satisfaction or utility received by consuming one more unit of a good or service.

Marginal Utility

The additional satisfaction or benefit (utility) that a consumer derives from purchasing one more unit of a good or service.

Marginal Utility

The additional satisfaction or utility received from consuming one more unit of a good or service.