Brink Financial Advisors Provides Accounting and Finance Assistance to Customers

question 50

Multiple Choice

Brink Financial Advisors provides accounting and finance assistance to customers in the retail business.Brink has four professionals on staff,plus an office with six clerical staff.Total compensation,including benefits,for the professional staff runs up to $800,000 per year,and normal billable hours are about 3,400 billable hours per year.The professional staff keep detailed time sheets organized by client number.The total office and administrative costs for the year are $290,000. Brink allocates office and administrative costs to clients monthly,using a predetermined overhead allocation rate based on billable hours.During July,Brink's professionals spent 43 hours on their client,Waseca Sales.Brink adds a 30% markup on its costs to calculate the amount billed to the customer.How much gross profit did Brink earn from Waseca Sales in July? (Round any intermediate calculations to two decimal places,and your final answer to the nearest whole number.)

• A) $13,784.94
• B) $3,035.241
• C) $3,667
• D) $4,135

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Definitions:

Periodic Inventory Method

An accounting approach where inventory values and cost of goods sold are determined at the end of an accounting period through physical inventory counts.

Purchases Discount

A reduction in the invoice price of goods, granted by the seller to the buyer for early payment within a specified time frame.

Gross Method

An accounting method for recording inventory purchases without deducting discounts at the time of purchase.

Periodic Inventory System

An inventory system that, at the end of each accounting period, calculates the cost of the unsold goods on hand by taking the cost of each unit times the number of units of each product on hand.