Illescas Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 6,400 units, but its actual level of activity was 6,440 units. The company has provided the following data concerning the formulas to be used in its budgeting:

-The selling and administrative expenses in the planning budget for December would be closest to:
A)$32,396
B)$33,608
C)$33,580
D)$32,598

Question

Illescas Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 6,400 units, but its actual level of activity was 6,440 units. The company has provided the following data concerning the formulas to be used in its budgeting:

-The selling and administrative expenses in the planning budget for December would be closest to:

-The selling and administrative expenses in the planning budget for December would be closest to:
A)$32,396 
B)$33,608 
C)$33,580 
D)$32,598

Quizplus · Accepted Answer

To calculate selling and administrative expenses in a planning budget, we need to sum up the budgeted figures for all the expenses. Looking at the options, we can see that option C has the closest value to the sum of the given expenses, which is:

Salaries and wages: $15,600
Rent expense: $5,000
Advertising expense: $1,200
Travel expense: $8,000
Office supplies expense: $3,500

Sum of expenses = $33,300
Therefore, the closest option is C, which is $33,580.

Illescas Corporation Manufactures and Sells a Single Product