Sorter Company Has Provided the Following Data for the Third

question 40

Multiple Choice

Sorter Company has provided the following data for the third quarter of the most recent year:
$\begin{array}{|l|r|}\hline \text { Sales } & \$ 500,000 \\\hline \text { Fixed Manufacturing Overhead } & 55,000 \\\hline \text { Direct Labour } & 72,500 \\\hline \text { Fixed Selling Expenses } & 46,250 \\\hline \text { Variable Manufacturing Overhead } & 41,000 \\\hline \text { Variable Administrative Expenses } & 48,000 \\\hline \text { Direct Materials } & 51,500 \\\hline \text { Fixed Administrative Expenses } & 44,500 \\\hline \text { Variable Selling Expenses } & 49,750\\\hline \end{array}$ Assume that direct labour is a variable cost and that there was no beginning or ending inventories.



-At the level of sales for the third quarter,how much in additional fixed selling expenses could Sorter Company have afforded to spend and still would have reported $41,500 operating income?

• A) $50,000.
• B) $87,750.
• C) $91,500.
• D) $96,250.

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Definitions:

Infiltration Capacity

The maximum rate at which soil can absorb water, affected by factors such as soil composition, moisture content, and vegetation cover.

Vegetative Cover

Plants and trees that cover the ground, reducing soil erosion and influencing the local climate.

Rainfall Intensity

The rate at which rain falls over a given area, measured in millimeters per hour or inches per hour.

Municipal Water

Water that is treated and supplied by a municipal corporation for public use in cities and towns.