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Proton Company has 6 sales representatives and pays them a salary of $20,000 each per month....

Proton Company has 6 sales representatives and pays them a salary of $20,000 each per month. It also pays 10 percent commission on the sale price of each refrigerator. Each refrigerator is sold at a price of $10,000. Compute the total selling expenses (associated with the sales representatives) incurred by Proton for the month of August. Assume each of the representatives sold 5 refrigerators in the month of August

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Answer #1

Fixed selling expense = Total salary paid to the sales representatives

= ($20,000 * 6)

= $120,000

Variable selling expenses = Commission paid to the sales representatives

= (6 representatives * 5 refrigerators * $10,000 * 10%)

= $30,000

Total selling expenses = Fixed selling expenses + Variable selling expenses

= $120,000 + $30,000

= $150,000

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