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 budgeted cash disbursements for selling and administrative expenses for April total $144,390, then how many Debs does the company plan to sell in April?

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 budgeted cash disbursements for selling and administrative expenses for April total $144,390, then how many Debs does the company plan to sell in April?

Quizplus · Accepted Answer

In order to find the number of Debs that the company plans to sell in April, we need to use information about the cost behavior of selling and administrative expenses. If we know the cost per unit of selling and administrative expenses, we can divide the total budgeted cash disbursements by the cost per unit to find the number of units sold.

Without that information, we can make an educated guess based on the answer choices. If we assume that the cost per unit of selling and administrative expenses is relatively consistent, we can look for the answer choice that is close to the total budgeted cash disbursements divided by a reasonable cost per unit.

$144,390 / $7.50 per Deb = 19,252 Debs

Option D is the closest to this estimate, so it is the best choice. However, it's important to note that this is just an estimate based on assumptions, and the actual number of Debs sold could vary based on actual cost behavior and sales demand.

Poriss Corporation Makes and Sells a Single Product Called a Yute