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

question 87

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 total operating expenses at Bigelow Company budgeted for July are

• A) $13,000
• B) $13,600
• C) $22,500
• D) $24,100

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Definitions:

First Year

The initial year of a particular time frame or activity, often used to set a baseline for comparison.

Profit Generated

The amount of money that remains from revenues after all the firm's expenses are subtracted.

Second Year

The period or stage that follows the first year in a multi-year sequence, such as in education or a job.

Annual Cost

The total expense associated with operating a business or owning an asset for one year.