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 selling and administrative 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 selling and administrative expenses,with "X" equal to the number of units sold would be:

Quizplus · Accepted Answer

Unit sales = $960,000 ÷ $60 per unit = 16,000 units
Selling expenses = Fixed selling expenses + (0.08 × Sales)
$200,000 = Fixed selling expenses + (0.08 × $960,000)
Fixed selling expenses = $200,000 - $76,800 = $123,200
Variable selling expense per unit = 0.08 × $60 per unit = $4.80 per unit
Administrative expenses = Fixed administrative expenses + ($2 per unit × 16,000 units)
$75,000 = Fixed administrative expenses + ($2 per unit × 16,000 units)
Fixed administrative expenses = $75,000 - $32,000 = $43,000
Total selling and administrative expenses = ($123,200 + $43,000)+ ($4.80 + $2.00)X
= $166,200 + $6.80X

Bee Company Is a Honey Wholesaler