Asked by Jeremiah Miller on May 27, 2024
Verified
The estimated selling and administrative expense for February is closest to:
A) $71,470
B) $37,200
C) $107,200
D) $70,000
Administrative Expense
Costs related to the general operation of a company, such as salaries of executive officers and costs associated with the corporate office.
Selling Expense
Costs incurred directly from the selling of products or services, such as commissions and advertising costs.
- Calculate estimated selling and administrative expenses.
Verified Answer
CJ
Courtney J. CarrollMay 28, 2024
Final Answer :
C
Explanation :
The estimated selling and administrative expense for February is calculated as follows:
Variable expenses:
Sales commissions: 10% x $600,000 = $60,000
Supplies: $0.10 x 50,000 = $5,000
Fixed expenses:
Rent: $40,000
Salaries: $50,000
Depreciation: $2,000
Total fixed expenses: $92,000
Total estimated selling and administrative expense for February:
Variable expenses + fixed expenses = $60,000 + $5,000 + $92,000 = $107,000 (rounded to the nearest hundred)
Therefore, the closest answer choice is C, $107,200.
Variable expenses:
Sales commissions: 10% x $600,000 = $60,000
Supplies: $0.10 x 50,000 = $5,000
Fixed expenses:
Rent: $40,000
Salaries: $50,000
Depreciation: $2,000
Total fixed expenses: $92,000
Total estimated selling and administrative expense for February:
Variable expenses + fixed expenses = $60,000 + $5,000 + $92,000 = $107,000 (rounded to the nearest hundred)
Therefore, the closest answer choice is C, $107,200.
Explanation :
The estimated selling and administrative expense for February is computed as follows: 
Learning Objectives
- Calculate estimated selling and administrative expenses.
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