Wilson Company Prepared the Following Preliminary Budget Assuming No Advertising

question 251

Multiple Choice

Wilson Company prepared the following preliminary budget assuming no advertising expenditures:
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.Budgeted Operating Income = 100,000 * 1.10 * $5.50 - 300,000 - 100,000 = $205,000.

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Definitions:

CD-50

A classification of heavy-duty gear oil, with "CD-50" indicating the oil's viscosity and performance characteristics according to specific standards.

Pinion Bearing Preload

The amount of force applied to pinion bearings, controlling how tightly they fit, influencing gear meshing and noise.

Thicker Spacer

A broader component used to create distance or fill gaps between objects in various applications.

Thinner Spacer

A slim component used to create or adjust the space between two parts, often in machinery, to ensure proper clearance or alignment.