Coffee Now prepared the following budget based on 10,000 cups of coffee sold. Al
ID: 2394565 • Letter: C
Question
Coffee Now prepared the following budget based on 10,000 cups of coffee sold. All product costs are variable expenses. Selling expenses are based on 1% of sales and $4,000 each period. Administrative expenses are not variable.
Sales
30,000.00
Direct Materials
3,000.00
Direct Labor
2,500.00
Overhead
5,000.00
Gross Profit
19,500.00
Selling expenses
4,300.00
Administrative expenses
2,000.00
6,300.00
Net Operating Income
13,200.00
For sales and EACH cost item, identify if it is FIXED or VARIABLE or MIXED
Sales
Direct materials
Direct Labor
Overhead
Selling Expenses
Administrative Expenses
Fixed
Variable
Mixed
Sales
30,000.00
Direct Materials
3,000.00
Direct Labor
2,500.00
Overhead
5,000.00
Gross Profit
19,500.00
Selling expenses
4,300.00
Administrative expenses
2,000.00
6,300.00
Net Operating Income
13,200.00
Explanation / Answer
For sales and EACH cost item, identify if it is FIXED or VARIABLE or MIXED
Sales Variable Direct materials Variable Direct labour Variable Overhead Variable Selling Expenses Mixed Administrative Expenses FixedRelated Questions
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