The Following Budget Information Is Available for the Arch Company

question 11

Multiple Choice

The following budget information is available for the Arch Company for January 2014: $$\begin{array} { | l | r | } \hline \text { Sales } & \$ 860,000 \\\hline \text { Cost of goods sold } & 540,000 \\\hline \text { Freight out } & 2,800 \\\hline \text { Administrative salaries } & 100,000 \\\hline \text { Sales commissions } & 5 \% \text { of sales } \\\hline \text { Advertising } & 20,000 \\\hline \text { Depreciation on store equipment } & 50,000 \\\hline \text { Rent on administration building } & 60,000 \\\hline \text { Miscellaneous administrative expenses } & 10,000 \\\hline\end{array}$$ All operating expenses are paid in cash in the month incurred. Compute total budgeted selling and administrative expenses (excluding interest) amount for January 2014.

• A) $262,500
• B) $283,000
• C) $240,000
• D) $285,800

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Definitions:

Attribution

The process by which individuals explain the causes of behavior and events.

Self-Serving Bias

The tendency to explain personal success by internal causes and personal failures by external causes.

Fundamental Attribution Error

A cognitive bias where individuals attribute others' actions to their character rather than external factors.

Spillover Effect

The influence of an event or behavior in one context spreading into another area, often unintentionally.