Bigelow Company budgets payroll at $4,000 per month plus a percentage of monthly sales.The June operating expense budget includes total payroll of $12,000 with budgeted sales of $160,000.Sales for July are budgeted at $180,000 while purchases of inventory for July are budgeted at $95,000.Depreciation and insurance for July are estimated at $1,000 and $600,respectively.Office and administrative expenses related to purchasing inventory are budgeted at 10% of purchases for the month.The purchase of $2,500 in equipment and $1,500 in furniture is expected in July.
- The total operating expenses budgeted for July are:

Question

Quizplus · Accepted Answer

The payroll for July is $4,000 plus 5% of sales ($180,000), which is $13,000. Office and administrative expenses are 10% of purchases ($95,000), which is $9,500. Adding depreciation ($1,000) and insurance ($600), the total is $24,100.

Bigelow Company Budgets Payroll at $4,000 Per Month Plus a Percentage