XYZ Company Expects to Sell 51,000 Units of Its Product

question 54

Multiple Choice

XYZ Company expects to sell 51,000 units of its product in the coming year. Each unit sells for $45. Sales brochures and supplies for the year are expected to cost $7,000. Three sales representatives cover the Southeast region. Each one's base salary is $25,000, and each earns a sales commission of 5 percent of the selling price of the units he or she sells. The sales representatives supply their own transportation; they are reimbursed for travel at a rate of $0.40 per mile. The company estimates that the sales representatives will drive a total of 75,000 miles next year. From the information provided, calculate XYZ Company's budgeted selling expenses for the coming year.

• A) $226,750
• B) $176,750
• C) $151,750
• D) $114,750

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Definitions:

Short-Form Merger

A type of merger that occurs when a parent company absorbs a subsidiary without obtaining approval from the subsidiary’s shareholders, typically allowed under certain conditions by law.

Statutory Provisions

Specific requirements, rules, or laws enacted by a government’s legislative body.

Creditors

Individuals or entities to whom money is owed by debtors.

Dissolution

The process of legally dissolving a corporation or partnership, effectively ending its existence.