The International Company makes and sells only one product. There are 2 divisions, one in France and one in Newcastle.
The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:
French Division Cost Structure

Newcastle Division Cost Structure

- All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the budgeted disbursements (including depreciation) for selling and administrative expenses for November total £154,180, how many units does the Newcastle Division plan to sell in November (rounded to the nearest whole unit)

A)51,000 units.
B)31,000 units.
C)28,000 units.
D)27,800 units.

Question

The International Company makes and sells only one product. There are 2 divisions, one in France and one in Newcastle.
The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:
French Division Cost Structure

Newcastle Division Cost Structure

- All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the budgeted disbursements (including depreciation) for selling and administrative expenses for November total £154,180, how many units does the Newcastle Division plan to sell in November (rounded to the nearest whole unit)

A)51,000 units. 
B)31,000 units. 
C)28,000 units. 
D)27,800 units.

Quizplus · Accepted Answer

The correct answer is determined by understanding that the total budgeted disbursements for selling and administrative expenses include both cash and non-cash items (like depreciation). Since depreciation is a non-cash expense and is excluded from the cash payments, the actual cash disbursements related to the number of units sold would be calculated by subtracting any depreciation amount from the total disbursements. However, without specific details on the depreciation amount or the per-unit or total selling and administrative expenses excluding depreciation, we cannot directly calculate the number of units. The choice provided as correct (D) suggests that based on the given total disbursements and any provided or implied information about per-unit costs or depreciation, 27,800 units is the calculated outcome. This would typically involve knowing the per-unit selling and administrative expense (excluding depreciation) and then calculating the number of units that would lead to the total disbursements when multiplied by this per-unit cost.

The International Company Makes and Sells Only One Product