47.Warshaw Company budgets payroll at $3,900 per month plus a percentage of mont

Question

47.Warshaw Company budgets payroll at $3,900 per month plus a percentage of monthly sales. The June operating expenses budget includes total payroll of $9,500 with budgeted sales of $140,000. Sales for July are budgeted at $130,000 while purchases of inventory for July are budgeted at $62,666.67 Depreciation and insurance for July are estimated at $1,300 and $600, respectively. Office and administrative expenses related to purchasing inventory are budgeted at 15% of purchases for the month. The purchase of $2,500 in equipment and $1,600 in furniture is expected in July The total operating expenses budgeted for July are A.$11,400 B.$18,500 C.$20,400 D.$9,100

Explanation / Answer

Payroll for june: 9500

Fixed Budget payroll : 3900

Sales incentive : 5600

Percentage of incentive on sales: (5600/140000*100) 4%

Operating expenses for July:

Payroll:

Fixed 3900

Sales incentive 5200

(4% of 130000)

Depreciation 1300

Insurance : 600

Office admin: 9400

(15% of 62666.67)

Total operating expense for July: $20,400.

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.