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23 July, 09:52

Techgear, Inc., manufactures specialty suits for triathletes. For the month of January, it projects the following selling and administrative expenses: sales commissions, 4% of sales; shipping expense, $4,500; advertising and marketing costs, $12,000, outstanding as a payable; electric and water utilities, $750; corporate office depreciation for computers, $8,800; bad debt expense, $8,000. Sales for the month of January equal $400,000. What is the total of expenses that will flow to the budgeted income statement?

A : $21,250

B : $33,250

C : $50,050

D : $41,250

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  1. 23 July, 10:46
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    C : $50,050

    Explanation:

    Budgeted sales: $400,000

    Budgeted Comission expense: $16,000

    Budgeted shipping expenses: $4,500

    Budgeted marketing costs: $12,000

    Budgeted utility bills: $750

    Budgeted depreciation expense: $8,800

    Budgeted bad expense: $8,000

    The sum of all those expenses is $50,050.

    The totality of the expeneses listed in the question are part of the budgeted income statement, except for the budgeted revenue, because it is obviously not a expense.
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