Pallen Company estimated sales of 11,000 units at $40 each, unit cost of goods sold of $22, marketing expense of $65,000 and a 10% commission on each unit sold.Administrative expense is budgeted at $50,000.
- What is Pallen's budgeted operating income?

Question

Quizplus · Accepted Answer

Budgeted operating income = $39,000
39,000 = ($40 × 11,000) - ($22 × 11,000) - $109,000* - $50,000
*109,000 = $65,000 + ($40 × 0.10 × 11,000) = Budgeted Marketing Expenses

Pallen Company Estimated Sales of 11,000 Units at $40 Each