1) Baxter Company, which pays a 12% commission to its salespeople, reported sale

Question

1) Baxter Company, which pays a 12% commission to its salespeople, reported sales revenues of $280,000 for the period just ended. If fixed and variable sales expenses totaled $70,000, what would these expenses total at sales of $260,000?

Multiple Choice

$31,200.
$36,400.
$65,000.
$67,600.
None of these.

2) Reynardo Company incurred $121,000 of depreciation for the year. Sixty percent relates to the firm's production facilities, and 40% relates to sales and administrative offices. If all items are handled in the proper manner, a review of the company's accounting records should reveal a:

Multiple Choice

debit to Depreciation Expense for $121,000.

debit to Manufacturing Overhead for $121,000.

debit to Manufacturing Overhead for $72,600.

debit to Work-in-Process Inventory for $48,400.

credit to Cash for $121,000.

Explanation / Answer

1) Variable selling commission = 280000*12%=33600

Fixed selling expense = 70000-33600 = 36400

Total expense on 280000 Sales = (260000*12%+36400) = 67600

so answer is d) $67600

2) Journal entry :

so answer is c) debit to Manufacturing Overhead for $72,600.

Date accounts & explanation debit Credit Manufacturing overhead (121000*60%) 72600 Selling and administrative expense 48400      Accumlated depreciaton 121000

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