Semi variable expenses
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Gasson Company is a merchandising firm. Next month the company expects to sell 800 units. The following data describe the company's revenue and cost structure:
Selling price per unit $40
Sales commission 5%
Purchase price (cost) per unit $18
Advertising expense $4,000 per month
Administrative expense $4,500 per month plus 15% of sales
Assume that all activity mentioned in this problem is within the relevant range.
4. The expected total administrative expense next month is:
A) $ 4,800. C) $ 9,300.
B) $13,300. D) $14,900.
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Solution Summary
The solution explains the computation of semi variable expenses such as administrative expenses.
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