Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are expected to exceed the prior month's results by 3%.
-Zhang pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales. Compute the projected selling expense to be reported on the selling expense budget for the manager for month ended June 30.
A) $8,652.
B) $5,768.
C) $11,652.
D) $8,600.
E) $8,768.

Question

Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are expected to exceed the prior month's results by 3%. 
-Zhang pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales. Compute the projected selling expense to be reported on the selling expense budget for the manager for month ended June 30.
A) $8,652.
B) $5,768.
C) $11,652.
D) $8,600.
E) $8,768.

Quizplus · Accepted Answer

The projected unit sales for June are 400 units * 1.03 = 412 units. The sales revenue for June is 412 units * $700 = $288,400. The commission is 2% of $288,400, which is $5,768. Adding the manager's salary of $3,000, the total selling expense is $5,768 + $3,000 = $8,768.

Zhang Industries Sells a Product for $700