Use the Information Below to Answer the Following Question(s)

question 112

Multiple Choice

Use the information below to answer the following question(s) .
Bigelow Company budgets payroll at $4,000 per month plus a percentage of monthly sales. The June operating expense budget includes total payroll of $12,000 with budgeted sales of $160,000. Sales for July are budgeted at $180,000 while purchases of inventory for July are budgeted at $95,000. Depreciation and insurance for July are estimated at $1,000 and $600, respectively. Office and administrative expenses related to purchasing inventory are budgeted at 10% of purchases for the month. The purchase of $2,500 in equipment and $1,500 in furniture is expected in July.
-The July payroll at Bigelow Company should be budgeted at

• A) $14,000
• B) $13,000
• C) $22,000
• D) $12,000

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