Reference: 06-02
Comparative income statements for Boggs Sports Equipment Company for the last two months are presented below:

\begin{array} { | l | l | l | } \hline & \text { July } & \text { August } \\\hline \text { Sales in Units } & 11,000 & 10,000 \\\hline & & \\\hline \text { Sales Revenue } & \$ 165,000 & \$ 150,000 \\\hline \text { Less Cost of Goods Sold } & 72,600 & 66,000 \\\hline \text { Gross Margin } & 92,400 & 84,000 \\\hline \text { Less Operating Expenses: } & & \\\hline \text { Rent } & 12,000 & 12,000 \\\hline \text { Sales Commissions } & 13,200 & 12,000 \\\hline \text { Maintenance Expenses } & 13,500 & 13,000 \\\hline \text { Clerical Expense } & 16,000 & 15,000 \\\hline \text { Total Operating Expenses } & 54,700 & 52,000 \\\hline \text { Net income } & \$ 37,700 & \$ 32,000 \\\hline\end{array}

All of the company's costs are either fixed, variable, or a mixture of the two (i.e., mixed). The company is a merchandising company. Assume that the relevant range includes all of the activity levels mentioned in this problem.
-The total monthly fixed cost for Boggs Sports Equipment Company is?
A)$12,000.
B)$25,000.
C)$40,000.
D)$22,500.

Expense a Is a Fixed Cost; Expense B Is a Variable

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge