The following information pertains to question 3 to 9. The February operating bu

ID: 2569069 • Letter: T

Question

The following information pertains to question 3 to 9. The February operating budget for Big Ben Boats shows the following figures:

Budgeted sales for February $100 000 and for March $200 000.

Collections for sales are 70% in the month of sale and 30% the month after the sale.

Gross margin is 30% of sales.

Administrative costs are $10 000 each month.

Beginning accounts receivable is $20 000.

Beginning inventory is $14 000.

Beginning accounts payable is $60 000. (All from inventory purchases.)

Purchases are paid in full the month following the purchase.

Desired ending inventory is 20% of next month's cost of goods sold (COGS).

6) The budgeted gross margin (gross profit) for March is:

Select one:

a. $200 000

b. $50 000

c. $140 000

d. $60 000

Budgeted Sales for March = $200,000

Gross Margin Ratio = 30%

Gross Margin for March = $200,000 * 30%

= $60,000

answer is (d)$60,000

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