Question

All operating expenses are paid in cash in the month incurred. If HDC expects to sell 20,000 units of inventory, the total budgeted selling and administrative expenses would be what amount on the January pro forma income statement

Answer 1

Answer:

$123,400

Explanation:

Calculation to determine what amount on the January pro forma income statement

Freight-out $5,000

(20,000 units x 0.25)

Depreciation on Admin. Equipment $10,000

Sales and Admin Sal. $46,400

[$40,000 + (.02 x $320,000)]

Advertising $12,000

Lease $45,000

Miscellaneous $5,000

Total $123,400

Therefore what amount on the January pro forma income statement is $123,400