XYZ Company expects to sell 37,000 units of its product in the coming year.Each unit sells for $45.Sales brochures and supplies for the year are expected to cost $7,000.Three sales representatives cover the Southeast region.Each one's base salary is $25,000,and each earns a sales commission of 5 percent of the selling price of the units he or she sells.The sales representatives supply their own transportation; they are reimbursed for travel at a rate of $0.40 per mile.The company estimates that the sales representatives will drive a total of 75,000 miles next year.From the information provided,calculate XYZ Company's budgeted selling expenses for the coming year.

Question

Quizplus · Accepted Answer

Total revenue = 37,000 units * $45 per unit = $1,665,000
Total selling expenses = (3 sales representatives * $25,000 base salary) + (0.05 * $45 * 37,000 units) + ($0.40 per mile * 75,000 miles) + $7,000 sales brochures and supplies
Total selling expenses = $75,000 + $78,750 + $30,000 + $7,000 = $190,750
Therefore, XYZ Company's budgeted selling expenses for the coming year is $195,250.

XYZ Company Expects to Sell 37,000 Units of Its Product