Denver Manufacturing Company has the following information: $\begin{array}{lr}
\text { Month } & \text { Budgeted Sales } \
\hline \text { Januaty } & \$ 76,000 \
\text { February } & 85,000 \
\text { March } & 92,000 \
\text { April } & 79,000
\end{array}$

$\begin{array}{lr}
\text { Budgeted } & \text { Expenses per Month } \
\text { Wages } & \$ 15,000 \
\text { Advertising } & 12,000 \
\text { Depreciation } & 3,000 \
\text { Other } & 4 \% \text { of sales }
\end{array}$ All cash expenses are paid as incurred._____ is the expected total expenses budgeted for the month of January.
A)$30,000
B)$30,040
C)$31,200
D)$33,040

Question

Denver Manufacturing Company has the following information: $\begin{array}{lr}
\text { Month } & \text { Budgeted Sales } \
\hline  \text { Januaty } & \$ 76,000 \
\text { February } & 85,000 \
\text { March } & 92,000 \
\text { April } & 79,000
\end{array}$

$\begin{array}{lr}
\text { Budgeted } & \text { Expenses per Month } \
\text { Wages } & \$ 15,000 \
\text { Advertising } & 12,000 \
\text { Depreciation } & 3,000 \
\text { Other } & 4 \% \text { of sales }
\end{array}$ All cash expenses are paid as incurred._____ is the expected total expenses budgeted for the month of January.
A)$30,000
B)$30,040
C)$31,200
D)$33,040

Quizplus · Accepted Answer

The total expenses for January are calculated by adding the fixed expenses (wages, advertising, depreciation) and the variable expenses (4% of sales). Fixed expenses are $15,000 (wages) + $12,000 (advertising) + $3,000 (depreciation) = $30,000. The variable expense for January is 4% of $76,000 = $3,040. Therefore, the total expenses for January are $30,000 + $3,040 = $33,040.

Denver Manufacturing Company Has the Following Information All Cash Expenses Are Paid as Incurred