MC Qu. 84 Brownsville Novelty Store prepared the... Brownsville Novelty Store pr

Question

MC Qu. 84 Brownsville Novelty Store prepared the... Brownsville Novelty Store prepared the following budget information for the month of May Sales are budgeted at $360,000. All sales are on account and a provision for bad debts is made for each month at three percent of sales for t - Inventory was $84,000 on April 30, an inventory increase of $12.000 is planned for May 31 . All inventory is marked to sell at cost plus 50 percent Estimated cash disbursements for selling and administrative expenses for the month are $48,000 Depreciation for May is projected at $6,000 Brownsville's budgeted operating income for May is: O $72.000. O $66.000 O $55.200 O $61.200 O $43.200

Explanation / Answer

Calculate operating income for may :

so answer is b) $66,000

Sales 360000 Cost of goods sold (360000*100/150) (240000) Gross profit 120000 Selling and administrative expense (48000) Depreciation expense (6000) Operating income 66000

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