Answer the Following Questions Using the Information Below

question 146

Multiple Choice

Answer the following questions using the information below:
The following information pertains to the January operating budget for Brindabella Corporation,a retailer:
Budgeted sales are $300 000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $250 000 in January
Marketing costs are $3000 each month
Distribution costs are $5000 each month
Administrative costs are $10 000 each month
-For January,budgeted gross margin is:

• A)$100 000.
• B)$50 000.
• C)$90 000.
• D)$140 000.

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Definitions:

Finished Goods

Products that have completed the manufacturing process and are ready for sale to customers.

Transportation Costs

Expenses associated with the movement of goods or materials from one location to another.

Sales Commissions

A form of compensation to salespersons for their sales achievements, usually calculated as a percentage of the sales they generate.

Net-of-Tax Basis

A method of presenting financial figures after the effect of taxes has been considered or deducted.