Poriss Corporation makes and sells a single product called a Yute. The company is in the process of preparing its Selling and Administrative Expense Budget for the last quarter of the year. The following budget data are available:

All of these expenses (except depreciation) are paid in cash in the month they are incurred.
-If the company has budgeted to sell 17,000 Debs in January, then the total budgeted variable selling and administrative expenses for January will be:

Question

Poriss Corporation makes and sells a single product called a Yute. The company is in the process of preparing its Selling and Administrative Expense Budget for the last quarter of the year. The following budget data are available:

All of these expenses (except depreciation) are paid in cash in the month they are incurred.
-If the company has budgeted to sell 17,000 Debs in January, then the total budgeted variable selling and administrative expenses for January will be:

Quizplus · Accepted Answer

We do not have information about the amount of the variable selling and administrative expenses per Deb, so we cannot simply multiply 17,000 by a cost per unit. Therefore, we need to look at the answer choices to see which one suggests a reasonable cost per unit. 
Option A assumes a cost of $2 per unit, which seems too low for a product like Deb.
Option C assumes a cost of $1.10 per unit, which could be possible but is still relatively low for a product with variable selling and administrative expenses.
Option D assumes a cost of $1.50 per unit, which again, could be possible but still seems a bit low.
Option B, on the other hand, assumes a cost of $2.30 per unit ($39,100 divided by 17,000), which seems reasonable for a product like Deb that may have higher variable selling and administrative expenses. Therefore, B is the best choice.

Poriss Corporation Makes and Sells a Single Product Called a Yute