The Following Details Have Been Extracted from the Budget of a Merchandising

question 130

Multiple Choice

The following details have been extracted from the budget of a merchandising company. $$\begin{array} { | l | l | } \hline \text { Rent Expense } & \$ 8,400 \text { per month } \\\hline \text { Depreciation Expense } & \$ 3,500 \text { per month } \\\hline \text { Insurance Expense } & \$ 2,000 \text { per month } \\\hline \text { Miscellaneous Expense } & 2 \% \text { of sales, paid as incurred } \\\hline \text { Commissions Expense } & 3 \% \text { of sales } \\\hline \text { Salaries Expense } & \$ 6,000 \text { per month } \\\hline\end{array}$$ $$\begin{array} { | l | l | l | l | } \hline \text { Dec } & \text { Tan } & \text { Feb } & \text { March } \\\hline \text { Sales } \$ 55,000 & \$ 60,000 & \$ 75,000 & \$ 90,000 \\\hline\end{array}$$ Commissions and salaries expenses are paid 50% in the month to which they are incurred and the balance in the next month.
Rent and miscellaneous expenses are paid as and when they occur.Insurance is prepaid at the beginning of the quarter.Calculate cash payments for the selling and administrative expenses for the first quarter of the next year.

• A)$21,100
• B)$49,200
• C)$70,300
• D)$26,200

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Definitions:

Level Strategy

A business approach that maintains a steady production rate or workforce level, even in the face of fluctuating demand.

Machine Capacity

The maximum amount of work that a machine or system can complete in a given period.

Inventory Levels

The quantity of goods or materials on hand at any given time, a crucial component in supply chain and inventory management.

Aggregate Planning

A marketing activity that attempts to balance supply and demand by determining the best level of production for a given time period.