Use the information below to answer the following question(s).
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 at Bigelow Company budgeted for July are

Question

Quizplus · Accepted Answer

- Payroll: $4,000 + (June sales $160,000 x percentage)
$12,000 = $4,000 + ($160,000 x percentage)
Percentage = 5%

- Payroll for July:
$4,000 + (July sales $180,000 x 5%) = $13,000

- Purchases related expenses: $95,000 x 10% = $9,500

- Other expenses:
Depreciation: $1,000
Insurance: $600
Equipment: $2,500
Furniture: $1,500

- Total operating expenses:
$13,000 + $9,500 + $1,000 + $600 + $2,500 + $1,500 = $24,100

Use the Information Below to Answer the Following Question(s)