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 16,000 Debs in February, then the total budgeted fixed selling and administrative expenses for February is:

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 16,000 Debs in February, then the total budgeted fixed selling and administrative expenses for February is:

Quizplus · Accepted Answer

The question provides no information about the cost structure of the Debs, so we cannot use that to determine the fixed selling and administrative expenses. Instead, we need to rely on the information given in the question, which is that the company has budgeted to sell 16,000 Debs in February. We can assume that the fixed selling and administrative expenses will not vary with the number of Debs sold, so we can use this information to calculate the total fixed selling and administrative expenses for February. We are not given any information about variable costs, so we can assume they are not included in this question. Therefore, the best choice is C, $110,000.

Poriss Corporation Makes and Sells a Single Product Called a Yute