Question

For February, sales revenue is $591,000; sales commissions are 6% of sales; the sales manager's salary is $91,500; advertising expenses are $81,800; shipping expenses total 3% of sales; and miscellaneous selling expenses are $2,500 plus 1/2 of 1% of sales. Total selling expenses for the month of February are a $211,260 b. $228,990 C. $175,800 d. 5231,945

Answer 1

Ans.	Option D   $231,945
	Selling Expense Budget
	For the Month of February
	Total sales	$591,000
	Variable cost:
	Sales commissions	$35,460
	Shipping expenses	$17,730
	Miscellaneous selling expenses	$2,955
	Total variable costs	$56,145
	Fixed cost:
	Sales manager's salary	$91,500
	Advertising expenses	$81,800
	Miscellaneous selling expenses	$2,500
	Total fixed costs	$175,800
	Total selling expenses	$231,945
	*Calculations of Variable costs:
	Total sales	$591,000
	Variable cost:
	Sales commissions	$591,000 * 6%
	Shipping expenses	$591,000 * 3%
	Miscellaneous selling expenses	$591,000 * 1% * 1 / 2
	*Fixed costs always remain constant.
	*Total selling expenses = Total variable cost + Total fixed cost