Bee Company is a honey wholesaler. An income statement and other data for the second quarter of the year are given below:

-Bee Company's cost formula for total operating expenses, with 'X' equal to the number of units sold would be

Question

Bee Company is a honey wholesaler. An income statement and other data for the second quarter of the year are given below:

-Bee Company's cost formula for total operating expenses, with 'X' equal to the number of units sold would be

Quizplus · Accepted Answer

To determine the cost formula for total operating expenses, we need to first calculate the variable cost per unit for both selling and administrative expenses:
- Selling expenses: 8% of sales = 0.08 x £60 = £4.80 per unit
- Administrative expenses: £2 per unit
Then, we can use the given data to form an equation:
Total operating expenses = Fixed cost + Variable cost per unit x Number of units sold
Plugging in the values for fixed cost and variable cost per unit, we get:
Total operating expenses = £166,200 + £6.80X
Therefore, the answer is D.

Bee Company Is a Honey Wholesaler