Pearl,Inchas Prepared the Operating Budget for the First Quarter of the Year.The

question 118

Multiple Choice

Pearl,Inc.has prepared the operating budget for the first quarter of the year.The company forecast sales of $40,000 in January,$50,000 in February,and $60,000 in March.Variable and fixed selling and administrative expenses are as follows:
Variable Expenses:
Power cost (30% of sales)
Miscellaneous expenses: (5% of sales)
Fixed Expenses:
Salaries expense: $8000 per month
Rent expense: $5000 per month
Depreciation expense: $1400 per month
Power cost/fixed portion: $800 per month
Miscellaneous expenses/fixed portion: $1200 per month
Calculate total budgeted selling and administrative expenses for the month of January.

• A)$30,400
• B)$37,400
• C)$14,000
• D)$33,900

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Definitions:

Ppf (Production Possibility Frontier)

A curve depicting the maximum possible output of two goods or services that can be produced with a fixed set of resources and technology, assuming all resources are fully employed.

Consumer Goods

Products and services that are purchased by individuals for personal use or consumption rather than for resale or manufacturing.

Capital Goods

Long-term assets used by businesses to produce goods and services, such as machinery, buildings, and equipment.

Technological Improvements

Enhancements and innovations in technology that increase productivity and efficiency in the production of goods and services.