Jupiter Company has the following information:
$\begin{array}{ll}\text { Month }&\text { Budgeted Purchases }\
\text { January } & \$ 76,000 \
\text { February } & 85,000 \
\text { March } & 100,000 \
\text { April } & 79,000
\end{array}$
Budgeted Operating Expenses Per Month
$\begin{array}{ll}
\text { Wages } & \$ 15,000 \
\text { Advertising } & 12,000 \
\text { Depreciation } & 3,000 \
\text { Sales Commissions } & 4 \% \text { of sales }
\end{array}$
All cash expenses are paid as incurred.What are the budgeted total cash disbursements for operating expenses in March?
A) $3,680
B) $30,000
C) $31,000
D) $34,000

Question

Quizplus · Accepted Answer

The budgeted total cash disbursements for operating expenses in March are $31,000. This is calculated as follows:Wages: $15,000Advertising: $12,000Depreciation: $3,000Sales Commissions: 4% of salesSales for March are not given, so we cannot calculate the sales commissions. However, we can assume that sales are at least $100,000, since the budgeted purchases for March are $100,000. This would result in sales commissions of at least $4,000.Therefore, the total budgeted cash disbursements for operating expenses in March are at least $31,000.

Jupiter Company Has the Following Information Budgeted Operating Expenses Per Month