PLEASE PROVIDE FORMULA! Scotch, Inc. has prepared the operating budget for the f

Question

PLEASE PROVIDE FORMULA!

Scotch, Inc. has prepared the operating budget for the first quarter of the year. The company forecast sales of $40,000 in January, $50,000 in February, and $60,000 in March. Variable and fixed expenses are as follows: Variable Expenses: Power cost (40% of sales) Miscellaneous expenses: (55% of sales) Fixed Expenses: Salaries expense: $10,000 per month Rent expense: $5,000 per month Depreciation expense: $1,400 per month Power cost/fixed portion: $800 per month Miscellaneous expenses/fixed portion: $1,000 per month Using the information above, calculate the amount of selling and administrative expenses for the month of February.

A.$45,200

B.$40,700

C.$36,200

D.$22,500

Explanation / Answer

PROFIT IN MONTHJ OF FEBRUARY => 50000- (95% OF 50000) => 2500

ALREADY GIVEN XEPNSES AMOUNT $ 18200

POWER COST GIVEN 40% OF SALES IR 20000 OUT OF WHICH 800 IS FIXED AND REMAIING 19200

AND MISCELLANEOUS IS 55%OF SALES ie $ 27500

SO, OPTION D IS THE ANSWER ie SELLING AND ADMINISTRATIVE EXPENSES => $ 22500

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